Exhibit 10.79

                              AMENDED AND RESTATED
                          CERTIFICATE OF DESIGNATION OF
                               THE PREFERRED STOCK

                                       OF

                                   INSCI CORP.


         Henry F. Nelson, being the duly elected President of INSCI CORP., a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify the following:

         1. The Corporation filed a Certificate of Designation of the Series A
Convertible Preferred Stock with the Secretary of State of the State of Delaware
on March 6, 2001 (the "Series A Designation").

         2. The Corporation filed a Certificate of Designation of the Series B
Convertible Preferred Stock with the Secretary of State of the State of Delaware
on June 26, 2001 (the "Series B Designation").

         3. The Corporation filed an amendment to the Series A Designation and
the Series B Designation with the Secretary of State of the State of Delaware on
March 31, 2003 (the "Series A and B Amendment").

         4. The Corporation filed a Certificate of Designation of the Series C
Convertible Preferred Stock of the Corporation with the Secretary of State on
September 4, 2003 (the "Series C Designation").

         5. The Board of Directors of the Corporation approved and adopted the
amendment and restatement of the Series A Designation, Series B Designation,
Series A and B Amendment and Series C Designation, attached hereto as EXHIBIT A
(the Amended and Restated Preferred Stock Designation"), pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, and the authority vested in it by its Certificate of Incorporation, as
amended.

                                              INSCI CORP.



                                              By:    /S/ HENRY F. NELSON
                                                     -------------------
                                                       Henry F. Nelson
                                                       President

                                              Date:    December 3, 2003
ATTEST:

By: /S/ CYNTHIA RAE BOTSCH
         Name:    Cynthia Rae Botsch
         Title:   Assistant Secretary


<PAGE>


                              AMENDED AND RESTATED
                           CERTIFICATE OF DESIGNATION

                            OF THE PREFERRED STOCK OF
                                   INSCI CORP.
                                TO BE DESIGNATED

                      SERIES A CONVERTIBLE PREFERRED STOCK
                      SERIES B CONVERTIBLE PREFERRED STOCK
                      SERIES C CONVERTIBLE PREFERRED STOCK


         INSCI CORP., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), pursuant to the
authority vested in the Board of Directors of the Corporation by its Certificate
of Incorporation, as amended, and pursuant to the provisions of Section 151 of
the General Corporation Law of the State of Delaware, certifies that the Board
adopted the following resolution at a meeting duly called and held on November
__, 2003, which resolution remains in full force and effect as of the date
hereof:

         RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation (the "Board") by its Certificate of Incorporation,
as amended, the designations of the three series of preferred stock be and
hereby are amended and restated, consisting of a total of 10,000,000 authorized
shares, to be designated (i) "Series A Convertible Preferred Stock", which
consists of 2,500,000 authorized shares (the "Series A Preferred Stock"); (iii)
"Series B Convertible Preferred Stock", which consists of 4,317,040 authorized
shares (the "Series B Preferred Stock"); and (iv) "Series C Convertible
Preferred Stock", which consists of 3,182,960 authorized shares (the "Series C
Preferred Stock", and collectively with the Series A Preferred Stock and the
Series B Preferred Stock, the "Preferred Stock"), having the following rights,
preferences, privileges, qualifications and restrictions:

         (a) DIVIDEND RIGHTS.

                  (i) DIVIDENDS. The holders of the Preferred Stock shall be
         entitled to receive dividends in the manner as follows:

                           (A) SERIES A PREFERRED STOCK. The holders of Series A
                  Preferred Stock, in preference to the holders of the Common
                  Stock, shall be entitled to receive cumulative dividends, but
                  only out of funds that are legally available therefor (as
                  defined by the Delaware General Corporation Law), at an annual
                  floating rate equal to the Prime Rate of Interest (as
                  reflected in the Money Rates Table Eastern Edition of the Wall
                  Street Journal) plus 2.5% of the Series A Original Issue Price
                  (as defined below) per annum on each outstanding share of
                  Series A Preferred Stock (as adjusted for any stock dividends,
                  combinations, splits, recapitalizations and the like with
                  respect to such shares). Such dividends shall accrue and be
                  payable at the end of each fiscal quarter of the Corporation
                  in shares of Series A Preferred Stock (valued at the Series A
                  Original Issue Price, as adjusted for any stock dividends,
                  combinations, splits, recapitalizations and the like with
                  respect to such shares). The original issue price of the
                  Series A Preferred Stock shall be $1.30 (the "Series A
                  Original Issue Price").


                                      -2-
<PAGE>


                           (B) SERIES B PREFERRED STOCK. The holders of Series B
                  Preferred Stock, in preference to the holders of the Common
                  Stock and the Series A Preferred Stock, shall be entitled to
                  receive cumulative dividends, but only out of funds that are
                  legally available therefor (as defined by the Delaware General
                  Corporation Law), at the rate of 1.915% of the Series B
                  Original Issue Price (as defined below) per annum on each
                  outstanding share of Series B Preferred Stock (as adjusted for
                  any stock dividends, combinations, splits, recapitalizations
                  and the like with respect to such shares). Such dividends
                  shall accrue and be payable monthly, and, at the option of the
                  holders of the Series B Preferred Stock, shall be payable
                  either (A) in cash or (B) in shares of Series C Preferred
                  Stock (valued at the Series C Original Issue Price, as
                  adjusted for any stock dividends, combinations, splits,
                  recapitalizations and the like with respect to such shares).
                  Such shares of Series C Preferred Stock issued in lieu of the
                  cash dividend are sometimes referred to as "PIK Shares". Upon
                  any conversion of the Series B Preferred Stock, all accrued
                  but unpaid dividends on the Series B Preferred Stock shall be
                  paid immediately prior to such shares being surrendered for
                  conversion. If the holders of the Series B Preferred Stock
                  request a cash dividend, but the Corporation cannot declare or
                  pay cash dividends due to a lack of available surplus or
                  insufficient net profits for the fiscal year in which the
                  dividend is to be paid and/or the preceding fiscal year, then
                  the holders of the Series B Preferred Stock may elect to
                  receive (i) PIK Shares in lieu of the cash dividend or (ii)
                  all undeclared and unpaid dividends that accrue until such
                  time as the Corporation determines that it has sufficient
                  funds to declare and pay the dividends. The original issue
                  price of the Series B Preferred Stock shall be $67.886 (the
                  "Series B Original Issue Price").

                           (C) SERIES C PREFERRED STOCK. The holders of Series C
                  Preferred Stock, in preference to the holders of the Common
                  Stock, the Series A Preferred Stock and the Series B Preferred
                  Stock, shall be entitled to receive cumulative dividends, but
                  only out of funds that are legally available therefor (as
                  defined by the Delaware General Corporation Law), at the rate
                  of 8% of the Series C Original Issue Price (as defined below)
                  per annum on each outstanding share of Series C Preferred
                  Stock (as adjusted for any stock dividends, combinations,
                  splits, recapitalizations and the like with respect to such
                  shares). Such dividends shall accrue and be payable
                  semi-annually on September 1 and March 1 of each year, and, at
                  the option of the Corporation shall be payable either (A) in
                  cash or (B) in shares of Series C Preferred Stock (valued at
                  the Series C Original Issue Price, as adjusted for any stock
                  dividends, combinations, splits, recapitalizations and the
                  like with respect to such shares). Such shares of Series C
                  Preferred Stock issued in lieu of the cash dividend are
                  sometimes referred to as "PIK Shares". Upon any conversion of
                  the Series C Preferred Stock, all accrued but unpaid dividends
                  on the Series C Preferred Stock shall be paid immediately
                  prior to such shares being surrendered for conversion. The
                  original issue price of the Series C Preferred Stock shall be
                  $1.9396 (the "Series C Original Issue Price").

                  (ii) CONSENT OF SERIES C PREFERRED STOCK HOLDERS. So long as
         any shares of Series C Preferred Stock shall be outstanding, without
         the prior written consent of the holders of a majority of the then
         issued and outstanding shares of Series C Preferred Stock, until all
         dividends (set forth in Section (a)(i) above) on the Series C Preferred
         Stock shall have been paid or declared and set apart:

                           (A) no dividend, whether in cash or property, shall
                  be paid or declared, nor shall any other distribution be made,
                  to any holder of Common Stock, Series A Preferred Stock or
                  Series B Preferred Stock; provided, however, that no consent
                  of the holders of the Series C Preferred Stock shall be
                  required prior to the payment of any cash dividend requested
                  by the holders of the Series B Preferred Stock pursuant to
                  Section (a)(i)(B) above; and

                           (B) no shares of any Common Stock, Series A Preferred
                  Stock or any Series B Preferred Stock shall be purchased,
                  redeemed, or otherwise acquired for value by the Corporation.

                  (iii) COMMON STOCK DIVIDENDS. In addition to the dividends set
         forth in Section (a)(i)(A), (B) and (C) above, each holder of the
         Series A Preferred Stock, Series B Preferred Stock and Series C
         Preferred Stock shall be entitled to receive, when, as and if declared
         by the Board of Directors of the Corporation, out of the assets of the
         Corporation legally available therefore (as defined by the Delaware
         General Corporation Law), dividends and distributions on parity and pro
         rata with the holders of the Common Stock calculated based on the
         number of shares as shall be equal to the whole number of shares of
         Common Stock into which such holder's aggregate number of shares of
         Series A Preferred Stock, Series B Preferred Stock or Series C
         Preferred Stock, as applicable, are convertible pursuant to Section (d)
         hereof immediately after the close of business on the record date fixed
         for the determination of the holders of the Common Stock entitled to
         receive such dividend or distribution.

         (b) VOTING RIGHTS.

                  (i) GENERAL RIGHTS. Except as otherwise provided herein or as
         required by law, each holder of Preferred Stock shall be entitled to
         vote on all matters, and shall be entitled to that number of votes
         equal to the largest number of whole shares of Common Stock into which
         such holder's shares of Preferred Stock could be converted pursuant to
         the provisions of Section (d) hereof at the record date for the
         determination of stockholders entitled to vote on such matter, or if no
         such record date is established, at the date of a meeting at such vote
         is taken or any written consent of stockholders is solicited. Except as
         otherwise provided by law, by the terms of this Amended and Restated
         Preferred Stock Designation or by the provisions establishing any other
         series of Preferred Stock, the holders of shares of Preferred Stock and
         Common Stock shall vote together as a single class on all matters.


                                      -3-
<PAGE>


                  (ii) SEPARATE VOTE OF SERIES C PREFERRED STOCK. In addition to
         any other vote or consent required herein or by law, the vote of the
         holders of a majority of the outstanding Series C Preferred Stock shall
         be necessary for effecting or validating the following actions:

                           (A) any authorization or issuance of any other
                  capital stock having any rights, preferences or privileges
                  senior to or PARI PASSU with the Series C Preferred Stock;

                           (B) any amendment, alteration, waiver or repeal of
                  any provision of the Certificate of Incorporation (including
                  this Amended and Restated Preferred Stock Designation or any
                  amendment thereto) or the Bylaws of the Corporation, that
                  alters or changes or adversely affects the voting or other
                  powers, preferences, or other special rights or privileges, or
                  restrictions of the Series C Preferred Stock;

                           (C) any increase or decrease the number of authorized
                  or outstanding shares of Series C Preferred Stock;

                           (D) any reclassification or recapitalization of any
                  outstanding shares of securities of the Corporation into
                  shares having rights, preferences or privileges senior to or
                  PARI PASSU with the Series C Preferred Stock, or otherwise
                  effecting any change to the rights, preferences and privileges
                  of the Series C Preferred Stock, or any other class or series
                  of capital stock of the Corporation, which would adversely
                  affect the Series C Preferred Stock;

                           (E) any increase or decrease in the number of
                  directors constituting the entire Board of Directors;

                           (F) any redemption, purchase or other acquisition by
                  the Corporation, either direct or indirect, of any Common
                  Stock, Series A Preferred Stock or Series B Preferred Stock;

                           (G) any transaction with any party related to or
                  affiliated with the Corporation, including but not limited to
                  any transaction that would result in the repayment of a
                  stockholder loan;


                                      -4-
<PAGE>


                           (H) any action that would permit any subsidiary or
                  affiliate of the Corporation to sell or issue shares of
                  capital stock to any party other than the Corporation;

                           (I) any action that would increase the number of
                  shares of capital stock available for issuance by the
                  Corporation (x) to employees, consultants or other
                  third-parties; or (y) in connection with acquisitions; or

                           (J) any action that would result in the Corporation
                  incurring or assuming more than $3,000,000 of indebtedness in
                  the aggregate.

                  (iii) BOARD OF DIRECTORS. Notwithstanding subsections (i) and
         (ii) above or any provision to the contrary contained herein, (A) the
         holders of the Series C Preferred Stock shall be entitled, voting
         together as a separate single class, to elect two (2) members of the
         Board at each election of directors, to be designated by SCP Private
         Equity Partners II, L.P., a Delaware limited partnership ("SCP"), so
         long as SCP holds any shares of Series C Preferred Stock; (B) the
         holders of the Series B Preferred Stock shall be entitled, voting
         together as a separate single class, to elect two (2) members of the
         Board at each election of directors, to be designated by a
         representative determined by a majority of the holders of the Series B
         Preferred Stock (the "Series B Representative"); and (C) the holders of
         the Series A Preferred Stock shall be entitled, voting together as a
         separate single class, to elect three (3) members of the Board at each
         election of directors, to be designated by a representative determined
         by a majority of the holders of the Series A Preferred Stock (the
         "Series A Representative"). Each of SCP, the Series B Representative
         and the Series A Representative shall notify the Corporation in writing
         of the identities of its designees for election to the Board, which
         notice shall be conclusive evidence of the consent of such designees to
         serve as directors of the Corporation. In the event that such
         representatives fail to provide such notice, the designees currently
         serving on the Board shall be deemed to be the applicable designees. If
         SCP, the Series B Representative or the Series A Representative has no
         designee serving (or otherwise designated to serve in the event of the
         resignation, death, removal or inability to serve of a designee, as
         provided in the last sentence of this subsection) on the Board, then
         the Board shall be entitled to make the nomination for SCP, the Series
         B Representative or the Series A Representative, as the case may be,
         for which such notice was required. In the event SCP fails to hold any
         Series C Preferred Stock, the holders of Series C Preferred Stock,
         voting together as a separate single class, shall be entitled to the
         director election rights previously held by SCP. In the event of any
         vacancy arising by reason of the resignation, death, removal of a
         designee of SCP, the Series B Representative, or the Series A
         Representative (which may include a removal by the holders of the
         applicable series of Preferred Stock, with or without cause, or at the
         written request of SCP, the Series B Representative or the Series A
         Representative, as applicable) or any designees' inability to serve,
         SCP (provided SCP then holds Series C Preferred Stock), the Series B
         Representative or the Series A Representative, as applicable, shall
         notify the Corporation of its choice to fill such vacancy, and the
         Board shall appoint such person to fill such vacancy and serve until
         the next meeting of the Corporation's stockholders for the election of
         directors. The class voting rights granted to the holders of the
         Preferred Stock pursuant to this subsection (iii) shall be in addition
         to, and not in lieu of, the voting rights granted to such holders under
         subsections (i) and (ii) above. Accordingly, the holders of the
         Preferred Stock shall be entitled to vote together with the holders of
         shares of the Common Stock as a single class with respect to the
         election of those directors for which the holders of the Preferred
         Stock do not have class voting rights.




                                      -5-
<PAGE>


         (C) LIQUIDATION RIGHTS.

                  (i) Upon any liquidation, dissolution, or winding up of the
         Corporation, whether voluntary or involuntary, before any distribution
         or payment shall be made to the holders of Common Stock, by reason of
         their ownership thereof, an amount equal to (A) in the case of the
         Series A Preferred Stock, the greater of (1) the Series A Original
         Issue Price (as adjusted for any stock dividends, combinations, splits,
         recapitalizations and the like with respect to such shares) plus an
         amount equal to all accrued and unpaid dividends for each share of
         Series A Preferred Stock held by each such holder or (2) the price per
         share a holder of Series A Preferred Stock would have been entitled to
         receive had all shares of outstanding Preferred Stock and Series C
         Preferred Stock been converted into Common Stock immediately preceding
         such liquidation, dissolution or winding up of the Corporation (the
         greater of (A)(1) or (A)(2) being referred to herein as the "Series A
         Liquidation Amount"); (B) in the case of the Series B Preferred Stock,
         the greater of (1) 51.6% of the Series B Original Issue Price (as
         adjusted for any stock dividends, combinations, splits,
         recapitalizations and the like with respect to such shares) plus an
         amount equal to all accrued and unpaid dividends for each share of
         Series B Preferred Stock held by each such holder or (2) the price per
         share a holder of Series B Preferred Stock would have been entitled to
         receive had all shares of outstanding Preferred Stock and Series B
         Preferred Stock been converted into Common Stock immediately preceding
         such liquidation, dissolution or winding up of the Corporation (the
         greater of (B)(1) or (B)(2) being referred to herein as the "Series B
         Liquidation Amount"); and (C) in the case of the Series C Preferred
         Stock, the greater of (1) 200% of the Series C Original Issue Price (as
         adjusted for any stock dividends, combinations, splits,
         recapitalizations and the like with respect to such shares) plus an
         amount equal to all accrued and unpaid dividends for each share of
         Series C Preferred Stock held by each such holder; or (2) the price per
         share a holder of Series C Preferred Stock would have been entitled to
         receive had all shares of outstanding Preferred Stock and Series C
         Preferred Stock been converted into Common Stock immediately preceding
         such liquidation, dissolution or winding up of the Corporation (the
         greater of (C)(1) or (C)(2) being referred to herein as the "Series C
         Liquidation Amount"). If, upon any such liquidation, dissolution, or
         winding up, the assets of the Corporation shall be insufficient to make
         payment to the holders of the Preferred Stock of the Series A
         Liquidation Amount, Series B Liquidation Amount and the Series C
         Liquidation Amount, then such assets shall be distributed first among
         the holders of Series C Preferred Stock at the time outstanding, pro
         rata (or if the assets of the Corporation are insufficient to make
         payment in full to all holders of the Series C Preferred Stock, then
         such assets will be distributed ratably to such holders in proportion
         to the full amounts to which they would otherwise be respectively
         entitled), then to the holders of the Series B Preferred Stock at the
         time outstanding, pro rata (or if the assets of the Corporation are
         insufficient to make payment in full to all holders of the Series B
         Preferred Stock, then such assets will be distributed ratably to such
         holders in proportion to the full amounts to which they would otherwise
         be respectively entitled); and finally to the holders of the Series A
         Preferred Stock, pro rata (or if the assets of the Corporation are
         insufficient to make payment in full to all holders of the Series A
         Preferred Stock, then such assets will be distributed ratably to such
         holders in proportion to the full amounts to which they would otherwise
         be respectively entitled).


                                      -6-
<PAGE>



                  (ii) DEEMED LIQUIDATION. The following events shall be
         considered a liquidation under this Section, unless the holders of the
         Series C Preferred Stock, by majority vote or written consent, deem
         such events not to be a liquidation:

                           (A) any consolidation or merger of the Corporation
                  with or into any other corporation or other entity or person
                  (or any other corporate reorganization), resulting in the
                  stockholders of the Corporation immediately prior to such
                  consolidation, merger or reorganization, owning less than 50%
                  of the Corporation's voting power immediately after such
                  consolidation, merger or reorganization; or any transaction or
                  series of related transactions to which the Corporation is a
                  party in which in excess of 50% of the Corporation's voting
                  power is transferred, excluding any consolidation or merger
                  effected exclusively to change the domicile of the Corporation
                  (an "Acquisition");

                           (B) any transaction or a series of related
                  transactions, other than transactions involving a holder of
                  Preferred Stock, in which a majority of the voting power is
                  transferred to a third party (or group of affiliated third
                  parties) who were not previously stockholders of the
                  Corporation; or

                           (C) any sale, lease or other disposition of all or
                  substantially all of the assets of the Corporation (an "Asset
                  Transfer").

                  (iii) NON-CASH CONSIDERATION. In any of the events set forth
         in subparagraph (ii), if the consideration received by the Corporation
         is other than cash, its value will be deemed its fair market value as
         determined in good faith by the Board of Directors. Any securities
         shall be valued as follows:

                           (A) Securities not subject to restrictions on free
                  marketability covered by subparagraph (B) below:

                                    (1) If traded on a securities exchange or
                           through the Nasdaq National Market (or a similar
                           national quotation system), the value shall be deemed
                           to be the average of the closing prices of the
                           securities on such quotation system over the 30 day
                           period ending three days prior to the closing;


                                      -7-
<PAGE>


                                    (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 30 day period ending three 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 Board of Directors.

                           (B) The method of valuation of securities subject to
                  restrictions on free marketability (other than restrictions
                  arising solely by virtue of a stockholder's status as an
                  affiliate or former affiliate) shall be to make an appropriate
                  discount from the market value determined as above in
                  subparagraphs (iii)(A)(1), (2) or (3) to reflect the
                  approximate fair market value thereof, as determined in good
                  faith by the Board of Directors.

                  (iv) NOTICE. Written notice of any such liquidation,
         dissolution or winding up (or deemed liquidation, dissolution or
         winding up) of the Corporation within the meaning of this Section,
         which states the payment date, the place where said payments shall be
         made and the date on which conversion rights as set forth herein
         terminate as to such shares (which shall be not less than 10 days after
         the date of such notice), shall be given by first class mail, postage
         prepaid, or by telecopy or facsimile, not less than 20 days prior to
         the payment date stated therein, to the then holders of record of
         Series A Preferred Stock, Series B Preferred Stock and Series C
         Preferred Stock, such notice to be addressed to each such holder at its
         address as shown on the records of the Corporation.

         (d) CONVERSION RIGHTS. The holders of the Preferred Stock shall have
the conversion rights as follows:

                  (i) OPTIONAL CONVERSION. Subject to and in compliance with the
         provisions of this Section (d), any shares of Preferred Stock may, at
         the option of the holder, be converted at any time into fully-paid and
         nonassessable shares of Common Stock. The number of shares of Common
         Stock to which a holder of (A) Series A Preferred Stock shall be
         entitled upon conversion shall be the product obtained by multiplying
         the "Series A Preferred Conversion Rate" then in effect (determined as
         provided in subsection (ii)(A)) by the number of shares of Series A
         Preferred Stock being converted; (B) Series B Preferred Stock shall be
         entitled upon conversion shall be the product obtained by multiplying
         the "Series B Preferred Conversion Rate" then in effect (determined as
         provided in subsection (ii)(B)) by the number of shares of Series B
         Preferred Stock being converted; (C) Series C Preferred Stock shall be
         entitled upon conversion shall be the product obtained by multiplying
         the "Series C Preferred Conversion Rate" then in effect (determined as
         provided in subsection (ii)(C)) by the number of shares of Series C
         Preferred Stock being converted.



                                      -8-
<PAGE>


                  (ii) PREFERRED STOCK CONVERSION RATE. The conversion rate in
         effect at any time for conversion of the Preferred Stock is as follows:

                           (A) SERIES A PREFERRED STOCK. In the case of the
                  Series A Preferred Stock, the conversion rate in effect at any
                  time for conversion of the Series A Preferred Stock (the
                  "Series A Preferred Conversion Rate") shall be the quotient
                  obtained by dividing the Series A Original Issue Price by the
                  "Series A Preferred Conversion Price," calculated as provided
                  in subsection (iii)(A) below.

                           (B) SERIES B PREFERRED STOCK. In the case of the
                  Series B Preferred Stock, the conversion rate in effect at any
                  time for conversion of the Series B Preferred Stock (the
                  "Series B Preferred Conversion Rate") shall be the quotient
                  obtained by dividing the Series B Original Issue Price by the
                  "Series B Preferred Conversion Price," calculated as provided
                  in subsection (iii)(B) below.

                           (C) SERIES C PREFERRED STOCK. In the case of the
                  Series C Preferred Stock, the conversion rate in effect at any
                  time for conversion of the Series C Preferred Stock (the
                  "Series C Preferred Conversion Rate") shall be the quotient
                  obtained by dividing the Series C Original Issue Price by the
                  "Series C Preferred Conversion Price," calculated as provided
                  in subsection (iii)(C) below.

                  (iii) PREFERRED STOCK CONVERSION PRICE. The conversion price
         for the Preferred Stock is as follows:

                           (A) SERIES A PREFERRED STOCK. The conversion price
                  for the Series A Preferred Stock shall initially be $0.11 (the
                  "Series A Preferred Conversion Price"). Such initial Series A
                  Preferred Conversion Price shall be adjusted from time to time
                  in accordance with this Section (d). All references to the
                  Series A Preferred Conversion Price herein shall mean the
                  Series A Preferred Conversion Price as so adjusted.

                           (B) SERIES B PREFERRED STOCK. The conversion price
                  for the Series B Preferred Stock shall initially be $.096980
                  (the "Series B Preferred Conversion Price"). Such initial
                  Series B Preferred Conversion Price shall be adjusted from
                  time to time in accordance with this Section (d). All
                  references to the Series B Preferred Conversion Price herein
                  shall mean the Series B Preferred Conversion Price as so
                  adjusted.


                                      -9-
<PAGE>


                           (C) SERIES C PREFERRED STOCK. The conversion price
                  for the Series C Preferred Stock shall initially be $.096980
                  (the "Series C Preferred Conversion Price"). Such initial
                  Series C Preferred Conversion Price shall be adjusted from
                  time to time in accordance with this Section (d). All
                  references to the Series C Preferred Conversion Price herein
                  shall mean the Series C Preferred Conversion Price as so
                  adjusted.

                  (iv) MECHANICS OF CONVERSION. Each holder of Preferred Stock
         who desires to convert the same into shares of Common Stock pursuant to
         this Section (d) shall surrender the certificate or certificates
         therefor, duly endorsed, at the office of the Corporation or any
         transfer agent for the Preferred Stock and shall give written notice to
         the Corporation at such office that such holder elects to convert the
         same. Such notice shall state the number of shares of Preferred Stock
         being converted. Thereupon, the Corporation shall promptly 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 is entitled
         and shall promptly pay in cash (at the Common Stock's fair market value
         determined by the Board of Directors as of the date of conversion) the
         value of any fractional share of Common Stock otherwise issuable to any
         holder of Preferred Stock. Such conversion shall be deemed to have been
         made at the close of business on the date of such surrender of the
         certificates representing the shares of Preferred Stock to be
         converted, and the person entitled to receive the shares of Common
         Stock issuable upon such conversion shall be treated for all purposes
         as the record holder of such shares of Common Stock on such date.

                  (v) ADJUSTMENT UPON COMMON STOCK EVENT. Upon the happening of
         a Common Stock Event (as hereinafter defined) at any time or from time
         to time after the date that the first share of Series C Preferred Stock
         is issued (the "Original Issue Date"), the Series A Preferred
         Conversion Price, Series B Preferred Conversion Price and Series C
         Preferred Conversion Price shall, simultaneously with the happening of
         such Common Stock Event, be adjusted by multiplying the Series A
         Preferred Conversion Price, Series B Preferred Conversion Price or
         Series C Preferred Conversion Price, as applicable, in effect
         immediately prior to such Common Stock Event by a fraction, (i) the
         numerator of which shall be the number of shares of Common Stock issued
         and outstanding immediately prior to such Common Stock Event, and (ii)
         the denominator of which shall be the number of shares of Common Stock
         issued and outstanding immediately after such Common Stock Event, and
         the product so obtained shall thereafter be the Series A Preferred
         Conversion Price, Series B Preferred Conversion Price, or Series C
         Preferred Conversion Price, as applicable. The applicable conversion
         prices of each of the series of Preferred Stock shall be readjusted in
         the same manner upon the happening of each subsequent Common Stock
         Event. As used in this Section (d), the term "Common Stock Event" shall
         mean (i) the issue by the Corporation of additional shares of Common
         Stock as a dividend or other distribution on outstanding Common Stock,
         (ii) a subdivision of the outstanding shares of Common Stock into a
         greater number of shares of Common Stock (by stock split,
         reclassification or otherwise), or (iii) a combination or
         consolidation, by reclassification or otherwise, of the outstanding
         shares of Common Stock into a smaller number of shares of Common Stock.


                                      -10-
<PAGE>


                  (vi) ADJUSTMENT FOR OTHER DIVIDENDS AND DISTRIBUTIONS. If at
         any time or from time to time after the Original Issue Date the
         Corporation pays a dividend or makes another distribution to the
         holders of the Common Stock (or fixes a record date for the
         determination of holders of Common Stock entitled to receive such
         dividend or other distribution) payable in securities of the
         Corporation or any of its subsidiaries, then in each such event a
         provision shall be made so that the holders of Preferred Stock shall
         receive upon conversion thereof, in addition to the number of shares of
         Common Stock receivable upon conversion thereof, the amount of
         securities of the Corporation which they would have received had their
         Preferred Stock been converted into Common Stock on the date of such
         event (or such record date, as applicable) and had they thereafter,
         during the period from the date of such event (or such record date, as
         applicable) to and including the conversion date, retained such
         securities receivable by them as aforesaid during such period, subject
         to all other adjustments called for during such period under this
         Section (d) with respect to the rights of the holders of the Preferred
         Stock or with respect to such other securities by their terms.

                  (vii) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND
         SUBSTITUTION. If at any time or from time to time after the Original
         Issue Date, the Common Stock issuable upon the conversion of the
         Preferred Stock is changed into the same or a different number of
         shares of any class or classes of stock, whether by recapitalization,
         reclassification or otherwise (other than an Acquisition or Asset
         Transfer as defined in Section (c) or a subdivision or combination of
         shares or stock dividend or a reorganization, merger, consolidation or
         sale of assets provided for elsewhere in this Section (d)), in any such
         event each holder of Preferred Stock shall have the right thereafter to
         convert such stock into the kind and amount of stock and other
         securities and property receivable upon such recapitalization,
         reclassification or other change by holders of the maximum number of
         shares of Common Stock into which such shares of Preferred Stock could
         have been converted immediately prior to such recapitalization,
         reclassification or change, all subject to further adjustment as
         provided herein or with respect to such other securities or property by
         the terms thereof.

                  (viii) ADJUSTMENT FOR REORGANIZATIONS, MERGERS OR
         CONSOLIDATIONS. If at any time or from time to time after the Original
         Issue Date, there is a capital reorganization of the Common Stock or
         the merger or consolidation of the Corporation with or into another
         corporation or another entity or person (other than an Acquisition or
         Asset Transfer as defined in Section (c) or a recapitalization,
         subdivision, combination, reclassification, exchange or substitution of
         shares provided for elsewhere in this Section (d)), as a part of such
         capital reorganization, provision shall be made so that the holders of
         the Preferred Stock shall thereafter be entitled to receive upon
         conversion of the Preferred Stock the number of shares of stock or
         other securities or property of the Corporation to which a holder of
         the number of shares of Common Stock deliverable upon conversion would
         have been entitled on such capital reorganization, subject to
         adjustment in respect of such stock or securities by the terms thereof.
         In any such case, appropriate adjustment shall be made in the
         application of the provisions of this Section (d) with respect to the
         rights of the holders of Preferred Stock after the capital
         reorganization to the end that the provisions of this Section (d)
         (including adjustment of the Series A Preferred Conversion Price,
         Series B Preferred Conversion Price and Series C Preferred Conversion
         Price then in effect and the number of shares issuable upon conversion
         of the Series A Preferred Stock, Series B Preferred Stock and Series C
         Preferred Stock) shall be applicable after that event and be as nearly
         equivalent as practicable.



                                      -11-
<PAGE>


                  (ix) SALE OF SHARES BELOW PREFERRED CONVERSION PRICE.

                           (A) If at any time or from time to time after the
                  Original Issue Date, the Corporation issues or sells, or is
                  deemed by the express provisions of this subsection (ix) to
                  have issued or sold Additional Shares of Common Stock (as
                  defined in subsection (ix)(B)(1) below), other than (w) as a
                  dividend or distribution on the Preferred Stock, (x) in
                  connection with a Common Stock Event as provided in subsection
                  (v) above, (y) as a dividend or other distribution on any
                  class of stock as provided in subsection (vi) above, and (z) a
                  subdivision or combination of shares of Common Stock as
                  provided in subsection (vii) above, for an Effective Price (as
                  defined in subsection (ix)(B)(4) below) less than the then
                  effective Series A Preferred Conversion Price, Series B
                  Preferred Conversion Price, or Series C Preferred Conversion
                  Price, then and in each such case the then existing Series A
                  Preferred Conversion Price, Series B Preferred Conversion
                  Price or Series C Preferred Conversion Price, as applicable,
                  shall be reduced, as of the opening of business on the date of
                  such issue or sale, to a price equal to the price paid per
                  share for such Additional Shares of Common Stock.

                           (B) For the purpose of making any adjustment required
                  under this subsection (ix):

                                    (1) "Additional Shares of Common Stock"
                           shall mean all shares of Common Stock issued (or,
                           pursuant to this Section, deemed to be issued) by the
                           Corporation, whether or not subsequently reacquired
                           or retired by the Corporation, other than: (A) upon
                           conversion of shares of Preferred Stock and (B)
                           shares of Common Stock issued or issuable by the
                           Corporation or any subsidiary to employees, officers,
                           directors or consultants pursuant to stock option
                           plans that are approved by the Board ("Incentive
                           Stock"), provided that the number of shares of
                           Incentive Stock does not exceed an aggregate of
                           30,000,000 shares (as adjusted for any stock
                           dividends, combinations, splits or similar events)
                           regardless of whether issued by the Corporation prior
                           to the date hereof.


                                      -12-
<PAGE>


                                    (2) The "Aggregate Consideration Received"
                           by the Corporation for any issue or sale (or deemed
                           issue or sale) of securities shall (i) (A) to the
                           extent it consists of cash, be computed at the gross
                           amount of cash received by the Corporation before
                           deduction of any underwriting or similar commissions,
                           compensation or concessions paid or allowed by the
                           Corporation in connection with such issue or sale and
                           without deduction of any expenses payable by the
                           Corporation; (B) to the extent it consists of
                           property other than cash, be computed at the fair
                           value of that property at the time of such issue as
                           determined in good faith by the Board; and (C) if
                           Additional Shares of Common Stock, Convertible
                           Securities or Rights or Options are issued or sold
                           together with other stock or securities or other
                           assets of the Corporation for a consideration which
                           covers both, be computed as the portion of the
                           consideration so received that may be reasonably
                           determined in good faith by the Board to be allocable
                           to such Additional Shares of Common Stock,
                           Convertible Securities or Rights or Options or (ii)
                           if no consideration is received by the Corporation,
                           be considered zero;

                                    (3) "Convertible Securities" shall mean any
                           evidence of indebtedness, stock or other securities
                           directly or indirectly convertible into or
                           exchangeable for shares of Common Stock;

                                    (4) The "Effective Price" of Additional
                           Shares of Common Stock shall mean the quotient
                           determined by dividing the total number of Additional
                           Shares of Common Stock issued or sold, or deemed to
                           have been issued or sold by the Corporation by the
                           provisions of clause (1), into the Aggregate
                           Consideration Received, or deemed to have been
                           received by the Corporation by the provisions of this
                           clause (4), for such issue or sale of such Additional
                           Shares of Common Stock; and

                                    (5) "Rights or Options" shall mean warrants,
                           options or other rights to purchase or otherwise
                           acquire shares of Common Stock or Convertible
                           Securities.

                           (C) For the purpose of making any adjustment to the
                  Series A Preferred Conversion Price, Series B Preferred
                  Conversion Price or Series C Preferred Conversion Price
                  required under this subsection (ix), if the Corporation issues
                  or sells any Rights or Options or Convertible Securities (or
                  shall fix a record date for the determination of holders of
                  any class of securities then entitled to receive any such
                  Rights or Options or Convertible Securities), then the
                  Corporation shall be deemed (x) to have issued, at the time of
                  the issuance of such Rights or Options or Convertible
                  Securities, that number of Additional Shares of Common Stock
                  that is equal to the maximum number of shares of Common Stock




                                      -13-
<PAGE>

                  issuable upon exercise of such Rights or Options or conversion
                  or exchange of such Convertible Securities upon their issuance
                  (or, in the case such a record date shall have been fixed, as
                  of the close of business on such record date) and (y) to have
                  received, as the Aggregate Consideration Received for the
                  deemed issuance of such additional shares of Common Stock, an
                  amount equal to the total amount of the consideration, if any,
                  received by the Corporation for the issuance of such Rights or
                  Options or Convertible Securities, plus, in the case of such
                  Rights or Options, the minimum total amount of consideration,
                  if any, payable to the Corporation upon the exercise in full
                  of such Rights or Options (including, with respect to Rights
                  or Options for Convertible Securities, the minimum aggregate
                  amount of consideration payable to the Corporation (other than
                  by cancellation of liabilities or obligations evidenced by
                  such Rights or Options) upon the conversion or exchange of
                  such underlying Convertible Securities), plus, in the case of
                  Convertible Securities, the minimum total amount of
                  consideration, if any, payable to the Corporation (other than
                  by cancellation of liabilities or obligations evidenced by
                  such Convertible Securities) upon the conversion or exchange
                  thereof; PROVIDED THAT:

                                    (1) if the minimum amounts of such
                           consideration cannot be ascertained, but are a
                           function of antidilution or similar protective
                           clauses, then the Corporation shall be deemed to have
                           received the minimum amounts of consideration without
                           reference to such clauses;

                                    (2) if the minimum amount of consideration
                           payable to the Corporation upon the exercise of such
                           Rights or Options or the conversion or exchange of
                           such Convertible Securities is reduced or the maximum
                           number of shares of Common Stock issuable upon the
                           exercise of such Rights or Options or the conversion
                           or exchange of such Convertible Securities is
                           increased over time or upon the occurrence or
                           non-occurrence of specified events, other than by
                           reason of antidilution or similar protective
                           adjustments, then the Series A Preferred Conversion
                           Price, Series B Preferred Conversion Price, and
                           Series C Preferred Conversion Price computed upon the
                           original issue or deemed issue thereof (or upon the
                           occurrence of a record date with respect thereto),
                           and any subsequent adjustments based thereon, shall,
                           upon any such decrease or increase becoming
                           effective, be recomputed to reflect such decrease or
                           increase, as the case may be (provided, however, that
                           no such adjustment of the Series A Preferred
                           Conversion Price, Series B Preferred Conversion Price
                           and Series C Preferred Conversion Price shall affect
                           Common Stock previously issued upon conversion of the
                           Series A Preferred Stock, Series B Preferred Stock
                           and Series C Preferred Stock, respectively); and

                                    (3) if the minimum amount of consideration
                           payable to the Corporation upon the exercise of such
                           Rights or Options or the conversion or exchange of
                           such Convertible Securities is subsequently increased
                           or the maximum number of shares of Common Stock
                           issuable upon the exercise of such Rights or Options




                                      -14-
<PAGE>

                           or the conversion or exchange of such Convertible
                           Securities is subsequently decreased, then the Series
                           A Preferred Conversion Price, Series B Preferred
                           Conversion Price and Series C Preferred Conversion
                           Price computed upon the original issue or deemed
                           issue thereof (or upon the occurrence of a record
                           date with respect thereto), and any subsequent
                           adjustments based thereon, shall, upon any such
                           increase or decrease becoming effective, be
                           recomputed to reflect such increase or decrease, as
                           the case may be, (provided, however, that no such
                           adjustment of the Series A Preferred Conversion
                           Price, Series B Preferred Conversion Price or Series
                           C Preferred Conversion Price shall affect Common
                           Stock previously issued upon conversion of the Series
                           A Preferred Stock, Series B Preferred Stock or Series
                           C Preferred Stock, respectively, and further provided
                           that no readjustment pursuant to this clause (3)
                           shall have the effect of increasing the Series A
                           Preferred Conversion Price, Series B Preferred
                           Conversion Price or Series C Preferred Conversion
                           Price, as applicable, to an amount which exceeds the
                           lower of (A) the Series A Preferred Conversion Price,
                           Series B Preferred Conversion Price or Series C
                           Preferred Conversion Price, as applicable, or (B) the
                           Series A Preferred Conversion Price, Series B
                           Preferred Conversion Price or Series C Preferred
                           Conversion Price, as applicable, that would have
                           resulted from any issuance of Additional Shares of
                           Common Stock between the original adjustment date and
                           such readjustment date).

                  No further adjustment of the Series A Preferred Conversion
                  Price, Series B Preferred Conversion Price or Series C
                  Preferred Conversion Price, adjusted upon the issuance of such
                  Rights or Options or Convertible Securities, shall be made as
                  a result of the actual issuance of shares of Common Stock on
                  the exercise of any such Rights or Options or the conversion
                  or exchange of any such Convertible Securities. If any such
                  Rights or Options or the conversion rights represented by any
                  such Convertible Securities shall expire without having been
                  fully exercised, then the Series A Preferred Conversion Price,
                  Series B Preferred Conversion Price or Series C Preferred
                  Conversion Price, as adjusted upon the issuance of such Rights
                  or Options or Convertible Securities (or upon the occurrence
                  of the record date with respect thereto), and any subsequent
                  adjustments based thereon, shall be readjusted to the Series A
                  Preferred Conversion Price, Series B Preferred Conversion
                  Price or Series C Preferred Conversion Price which would have
                  been in effect had an adjustment been made on the basis that
                  (x) the only Additional Shares of Common Stock so issued were
                  the shares of Common Stock, if any, that were actually issued
                  or sold on the exercise of such Rights or Options or rights of
                  conversion or exchange of such Convertible Securities and (y)
                  the consideration received with respect to Additional Shares
                  of Common Stock was the consideration actually received by the
                  Corporation upon such exercise of such Rights or Options, plus



                                      -15-
<PAGE>

                  the consideration, if any, actually received by the
                  Corporation for the granting of all such Rights or Options,
                  whether or not exercised, plus the consideration received for
                  issuing or selling all such Convertible Securities actually
                  converted or exchanged, plus the consideration, if any,
                  actually received by the Corporation (other than by
                  cancellation of liabilities or obligations evidenced by such
                  Convertible Securities) on the conversion or exchange of such
                  Convertible Securities provided, however, that no such
                  adjustment of the Series A Preferred Conversion Price, Series
                  B Preferred Conversion Price or Series C Preferred Conversion
                  Price shall affect Common Stock previously issued upon
                  conversion of the Preferred Stock. In the case of any Rights
                  or Options which expire by their terms not more than 30 days
                  after the date of issue thereof, no adjustment of the Series A
                  Preferred Conversion Price, Series B Preferred Conversion
                  Price or Series C Preferred Conversion Price shall be made
                  (except as to shares of Preferred Stock converted in such
                  period) until the expiration or exercise of all such Rights or
                  Options, whereupon such adjustment shall be made in the same
                  manner provided above. If any such record date shall have been
                  fixed and such Rights or Options or Convertible Securities are
                  not issued on the date fixed thereof, the adjustment
                  previously made in the Series A Preferred Conversion Price,
                  Series B Preferred Conversion Price or Series C Preferred
                  Conversion Price which became effective on such record date
                  shall be canceled as of the close of business on such record
                  date, and shall instead be made on the actual date of
                  issuance, if any.

                  (x) PREFERRED STOCK WARRANTS. Notwithstanding anything
         contained herein, in the event that any warrants for the Series A
         Preferred Stock outstanding as of the Original Issue Date are exercised
         (a "Warrant Exercise"), the Corporation shall immediately issue to each
         holder of Series C Preferred Stock such additional shares of Series C
         Preferred Stock so that such holder's percentage ownership of the
         Corporation's Common Stock on a fully-diluted basis after such Warrant
         Exercise is equal to its percentage ownership of the Corporation's
         Common Stock on a fully-diluted basis immediately prior to such Warrant
         Exercise. The holders of Series C Preferred Stock shall be entitled to
         receive additional shares of Series C Preferred Stock pursuant to this
         subsection (x) upon each Warrant Exercise.

                  (xi) CERTIFICATE OF ADJUSTMENT. In each case of an adjustment
         or readjustment of the Series A Preferred Conversion Price, Series B
         Preferred Conversion Price or Series C Preferred Conversion Price for
         the number of shares of Common Stock or other securities issuable upon
         conversion of the Preferred Stock, or if the Preferred Stock is then
         convertible pursuant to this Section (d), the Corporation, at its
         expense, shall compute such adjustment or readjustment in accordance
         with the provisions hereof and prepare a certificate showing such
         adjustment or readjustment, and shall mail such certificate, by first
         class mail, postage prepaid, to each registered holder of Preferred
         Stock at the holder's address as shown in the Corporation's books. The
         certificate shall set forth such adjustment or readjustment, showing in
         detail the facts upon which such adjustment or readjustment is based,
         including a statement of (i) the consideration received or deemed to be
         received by the Corporation for any Additional Shares of Common Stock
         issued or sold or deemed to have been issued or sold, (ii) the Series A
         Preferred Conversion Price, Series B Preferred Conversion Price or
         Series C Preferred Conversion Price at the time in effect, (iii) the
         number of Additional Shares of Common Stock and (iv) the type and
         amount, if any, of other property which at the time would be received
         upon conversion of the Preferred Stock.


                                      -16-
<PAGE>


                  (xii) NOTICES OF RECORD DATE. Upon (i) 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 or other distribution, or (ii) any Acquisition (as
         defined in Section (c)) or other capital reorganization of the
         Corporation, any reclassification or recapitalization of the capital
         stock of the Corporation, any merger or consolidation of the
         Corporation with or into any other corporation, or any Asset Transfer
         (as defined in Section (c)), or any voluntary or involuntary
         dissolution, liquidation or winding up of the Corporation, the
         Corporation shall mail to each holder of Preferred Stock at least 10
         days prior to the record date specified therein (or such shorter period
         approved by a majority of the outstanding Preferred Stock) a notice
         specifying (A) the date on which any such record is to be taken for the
         purpose of such dividend or distribution and a description of such
         dividend or distribution, (B) the date on which any such Acquisition,
         reorganization, reclassification, transfer, consolidation, merger,
         Asset Transfer, dissolution, liquidation or winding up is expected to
         become effective, and (C) the date, if any, that is to be fixed as to
         when the holders of record of Common Stock (or other securities) shall
         be entitled to exchange their shares of Common Stock (or other
         securities) for securities or other property deliverable upon such
         Acquisition, reorganization, reclassification, transfer, consolidation,
         merger, Asset Transfer, dissolution, liquidation or winding up.

                  (xiii) FRACTIONAL SHARES. No fractional shares of Common Stock
         shall be issued upon conversion of Preferred Stock. All shares of
         Common Stock (including fractions thereof) issuable upon conversion of
         more than one share of Preferred Stock by a holder thereof shall be
         aggregated for purposes of determining whether the conversion would
         result in the issuance of any fractional share. If, after the
         aforementioned aggregation, the conversion would result in the issuance
         of any fractional share, the Corporation shall, in lieu of issuing any
         fractional share, pay cash equal to the product of such fraction
         multiplied by the Common Stock's fair market value (as determined by
         the Board of Directors) on the date of conversion.

                  (xiv) 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 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 the
         Preferred Stock. 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 the Preferred Stock, the Corporation
         will take such corporate action as may be necessary to increase its
         authorized but unissued shares of Common Stock to such number of shares
         as shall be sufficient for such purpose.



                                      -17-
<PAGE>


                  (xv) NOTICES. Any notice required by the provisions of this
         Section (d) shall be in writing and shall be deemed effectively given:
         (i) upon personal delivery to the party to be notified, (ii) when sent
         by confirmed electronic mail or facsimile if sent during normal
         business hours of the recipient; if not, then on the next business day,
         (iii) five days after having been sent by registered or certified mail,
         return receipt requested, postage prepaid, or (iv) one (1) day after
         deposit with a nationally recognized overnight courier, specifying next
         day delivery, with verification of receipt. All notices shall be
         addressed to each holder of record at the address of such holder
         appearing on the books of the Corporation.

                  (xvi) PAYMENT OF TAXES. The Corporation will pay all taxes
         (other than taxes based upon income) and other governmental charges
         that may be imposed with respect to the issue or delivery of shares of
         Common Stock upon conversion of shares of Preferred Stock, excluding
         any tax or other charge imposed in connection with any transfer
         involved in the issue and delivery of shares of Common Stock in a name
         other than that in which the shares of Preferred Stock so converted
         were registered.

                  (xvii) NO IMPAIRMENT. The Corporation shall not avoid or seek
         to avoid the observance or performance of any of the terms to be
         observed or performed hereunder by the Corporation, but shall at all
         times in good faith assist in carrying out all such actions as may be
         reasonably necessary or appropriate in order to protect the conversion
         rights of the holders of the Preferred Stock against impairment.

         (E)      MANDATORY REDEMPTION.

                  (i) REQUEST BY HOLDERS OF PREFERRED STOCK.

                           (A) SERIES A PREFERRED REDEMPTION. Upon the prior
                  written request of the holders of at least twenty-five percent
                  (25%) of the Series A Preferred Stock, on a date that is five
                  (5) years following the Corporation's first issuance of Series
                  A Preferred Stock (the "Series A Redemption Date"), the
                  Corporation shall redeem for cash, out of legally available
                  funds, all of the issued and outstanding shares of the Series
                  A Preferred Stock.

                           (B) SERIES B PREFERRED REDEMPTION. Upon the prior
                  written request of the holders of at least twenty-five percent
                  (25%) of the Series B Preferred Stock, on March 31, 2006 (the
                  "Series B Redemption Date"), the Corporation shall redeem for
                  cash, out of legally available funds, all of the issued and
                  outstanding shares of the Series B Preferred Stock.

                           (C) SERIES C PREFERRED REDEMPTION. Upon the prior
                  written request of the holders of a majority in interest of
                  the Series C Preferred Stock, on September 1, 2009 (the
                  "Series C Redemption Date"), the Corporation shall redeem for
                  cash, out of legally available funds, all of the issued and
                  outstanding shares of the Series C Preferred Stock.



                                      -18-
<PAGE>


                  (ii) REDEMPTION PRICE OF PREFERRED STOCK. The price at which
         the Preferred Stock shall be redeemed is as follows:

                           (A) SERIES A REDEMPTION PRICE. The price at which the
                  Series A Preferred Stock shall be redeemed (the "Series A
                  Redemption Price") shall be equal to the Series A Original
                  Issue Price (as adjusted for any stock dividends,
                  combinations, splits, recapitalizations and the like with
                  respect to such shares) for each share of Series A Preferred
                  Stock plus an amount equal to all unpaid dividends which shall
                  have accrued for each share of Series A Preferred Stock so
                  redeemed.

                           (B) SERIES B REDEMPTION PRICE. The price at which the
                  Series B Preferred Stock shall be redeemed (the "Series B
                  Redemption Price") shall be equal to $10.00 (as adjusted for
                  any stock dividends, combinations, splits, recapitalizations
                  and the like with respect to such shares) for each share of
                  Series B Preferred Stock plus an amount equal to all unpaid
                  dividends which shall have accrued for each share of Series B
                  Preferred Stock so redeemed.

                           (C) SERIES A REDEMPTION PRICE. The price at which the
                  Series C Preferred Stock shall be redeemed (the "Series C
                  Redemption Price") shall be equal to the Series C Original
                  Issue Price (as adjusted for any stock dividends,
                  combinations, splits, recapitalizations and the like with
                  respect to such shares) for each share of Series C Preferred
                  Stock plus an amount equal to all unpaid dividends which shall
                  have accrued for each share of Series C Preferred Stock so
                  redeemed.

                  (iii) PAYMENT OF REDEMPTION PRICE. To receive the applicable
         Redemption Price, the holder of shares of Preferred Stock must present
         and surrender the certificate or certificates representing such shares
         (duly endorsed for transfer) to the Corporation at the principal
         executive offices of the Corporation no later than three business days
         prior to the applicable Redemption Date. The Corporation shall pay the
         Redemption Price to, or to the order of, the person whose name appears
         on such certificate or certificates as the owner thereof. The
         Corporation shall pay the entire Redemption Price on the Redemption
         Date.

                  (iv) EFFECT OF REDEMPTION. From and after the applicable
         Redemption Date, unless the Corporation shall default in providing for
         the payment of the applicable Redemption Price, all dividends on such
         shares as are accepted for redemption pursuant to this Section (e)
         shall cease to accrue, and all rights of the holders of any such shares
         subject to redemption as stockholders of the Corporation with respect
         to such shares, except the right to receive the Redemption Price, shall
         cease and terminate. Any shares of Preferred Stock that are redeemed by
         the Corporation shall be retired and shall not be reissued.



                                      -19-
<PAGE>


                           (F) WAIVER. Any rights of the holders of Series A
                  Preferred Stock, Series B Preferred Stock and Series C
                  Preferred set forth herein may be waived by the affirmative
                  vote or consent of the holders of a majority of the shares of
                  the Series A Preferred Stock, Series B Preferred Stock and
                  Series C Preferred Stock, respectively, then outstanding.













                                      -20-
<PAGE>



         IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its President, Chief Executive Officer, Chief
Financial Officer and Secretary on December 3, 2003.

By:  /S/ HENRY F. NELSON
     -------------------
Name:    Henry F. Nelson
Title:   President, Chief Executive Officer,
         Chief Financial Officer and Secretary





























                                      -21-
<PAGE>