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       CERTIFICATE OF DESIGNATION OF RIGHTS OF SERIES B PREFERRED SHARES
                                       OF
                        AQUA VIE BEVERAGE CORPORATION-H
Pursuant to Section 151 (g) of Title 8 of the General Corporate Law of the State
of Delaware and Article V of the Articles of Incorporation, the Directors hereby
                                   designate
            The voting powers, designations, preferences, rights and
                qualifications, limitations and restrictions of:

                           "SERIES B PREFERRED SHARES"

      And there is authorized to be issued 200,000 shares thereof with the
                    following rights, terms and preferences:

           1.        DIVIDENDS.

           Right to Preferential Dividends. Subject to the rights and
preferences of other classes or series of Preferred Shares, the Holders of the
then outstanding Series B Preferred Shares {except when there shall have been
either a notification of election for conversion by the Holders under Section
5(a), hereunder, or the conditions shall have been fulfilled for a conversion by
the Company as provided in Section 5(b) hereunder, whether or not notification
thereof has been made by the Company, (unless the Company shall expressly give
notice it elects not to require such conversion)} shall be entitled to receive,
if, when, and as declared by the Board, out of any funds legally available
therefor, a non-cumulative preference of 10% on cash dividends up to $6.00
maximum total accumulated dividends per Series B Preferred Share held thereby.
These dividends shall be payable, when and as declared by the Board. Dividends
on the Series B Preferred Shares shall be non-cumulative, there shall be no
minimum dividends, and no rights shall accrue to the Holders of the Series B
Preferred Shares in the event that the Company shall fail to declare or pay
dividends on the Series B Preferred Shares, whether or not the earnings of the
Company in that previous fiscal year were sufficient to pay such dividends in
whole or in part. In the event that the number of outstanding Series B Preferred
Shares are adjusted by stock split, reverse split, or other corporate action,
the preference stated herein shall be adjusted accordingly. The balance of any
such dividends so declared shall be allocated as between Series B Preferred
Shares and Common Shares as if said Series B Preferred Shares had been converted
to Common Shares based on the Conversion Ratio (as adjusted) provided herein,
and as to any other classes or series of Preferred Shares in accordance with the
rights and preferences thereof.

           2.        LIQUIDATION RIGHTS OF SERIES B PREFERRED SHARES.

           (a) Preference. Subject to the rights and preferences of other
classes or series of Preferred Shares in the event of any liquidation,
dissolution, or winding-up of the Company, whether voluntary or involuntary,
{except when there shall have been either a notification of election for
conversion by the Holders under Section 5(a), hereunder, or

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the conditions shall have been fulfilled for a conversion by the Company as
provided in Section 5(b) hereunder, whether or not notification thereof has been
made by the Company, (unless the Company shall expressly give notice it elects
not to require such conversion)} the Holders of the Series B Preferred Shares
then outstanding shall be entitled to be paid out of the assets of the Company
available for distribution to its shareholders, whether such assets are capital,
surplus, or earnings, before any payment or declaration and setting apart for
payment of any amount shall be made in respect of the Common Stock, an amount
equal to $6.00 per Series B Preferred Share held thereby plus an amount equal to
all declared and unpaid dividends thereon, less accumulated total dividends paid
thereto (but not less than zero). If upon any liquidation, dissolution, or
winding up of the Company, whether voluntary or involuntary, the assets to be
distributed to the Holders of the Series B Preferred Shares shall be
insufficient to permit the payment to such shareholders of the full preferential
amount aforesaid, then all of the assets of the Company to be distributed shall
be distributed ratably to the Holders of the Series B Preferred Shares, subject
to any rights or preferences of any other classes or series of Preferred Shares,
on the basis of the number of shares of Series B Preferred Shares so held.

(b) Payments to Common Stock. After the preferred payment of $6.00 per Series B
Preferred Share is made to Holders of the Series B Preferred Shares the Holders
of the Series B Preferred Shares shall be entitled to share with Common Shares,
based on the adjusted conversion ratio of Preferred Series B Shares to Common
Shares as if converted, and as to other Classes or Series of Preferred Shares
based on the conversion ratio of said Shares to Common as if converted or as
otherwise provided in the rights and designations thereof as may from time to
time be made by the Board of Directors, all remaining assets of the Company to
be distributed.

(c) Effect of Adjustments of Shares. In the event that the number of outstanding
Series B Preferred Shares are adjusted by stock split, reverse split, or other
corporate action, the preference stated herein shall be adjusted accordingly.

3. MERGER, CONSOLIDATION.

           (a) Preference. Subject to the rights and preferences of other
classes or series of Preferred Shares in the event of any merger or share
exchange of the Company, or a sale or other disposition of all or substantially
all of the assets of the Company {except when there shall have been either a
notification of election for conversion by the Holders under Section 5(a),
hereunder, or the conditions shall have been fulfilled for a conversion by the
Company as provided in Section 5(b) hereunder, whether or not notification
thereof has been made by the Company, (unless the Company shall expressly give
notice it elects not to require such conversion)} the Holders of the Series B
Preferred Shares then outstanding shall be entitled to receive, before any
payment or declaration and setting apart for payment of any amount shall be made
in respect of the Common Stock, for each share of such Series B Preferred Stock
so held, in cash or in securities (including, without limitation, debt
securities) received from the acquiring corporation, at the closing of any

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such transaction, an amount equal to $6.00 per Series B Preferred Share, plus an
amount equal to all declared and unpaid dividends thereon, less total
accumulated dividends paid thereto (but not less than zero). In the event that
the number of outstanding Series B Preferred Shares are adjusted by stock split,
reverse split, or other corporate action, the preference stated herein shall be
adjusted accordingly

           (b) Remaining Proceeds. Subject to the rights and preferences of
other classes or series of Preferred Shares after the payment or distribution to
the Holders of the Series B Preferred Shares of the full preferential amount,
the Holders of the Series B Preferred Shares, Holders of other Series or Classes
of Preferred Shares according to the Rights and Designations thereof and Holders
of Common Stock then outstanding shall be entitled to receive ratably, with all
Series B Preferred Shares treated as if it had been converted into Common Stock
pursuant to Section 5 hereof, all remaining proceeds of the Company to be
distributed.

           (c) Valuation of securities received pursuant to a merger, share
exchange, sale of substantially all the assets or similar transaction. In the
event that a transaction occurs pursuant to which non-cash assets are received
and to which this Section applies, the assets received for the purposes of this
Section shall be valued as follows:

                     (i) If the assets received are securities that are listed
           on NASDAQ or an exchange, the value shall be deemed to be the 3 day
           high average closing price (or average between bid/ask if OTC) on
           such exchange or NASDAQ over the 30 day period prior to the closing
           of the transaction by which the securities are received.

                     (ii) If the assets received are of readily ascertainable
           market value, then that value shall be used.

                     (iii) If the assets are unlisted securities or other assets
           that do not have a readily ascertainable value, the Board of
           Directors in good faith will value said assets.

                     (iv) The fact that assets exist which may require a
           valuation process as described herein shall not delay closing the
           transaction by which the assets are being received.

           (d) Notice. With respect to any transaction which involves a merger
or exchange of shares, or a sale of substantially all the assets not in the
ordinary course of business, the Series B shareholders shall receive not less
than ten days notice of the transaction and the terms and conditions thereof.


      4. VOTING RIGHTS.


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           (a) Each Holder of Series B Preferred Shares shall be entitled to
vote on all matters including election of the Board of Directors and, except as
otherwise expressly provided herein, shall be entitled to a vote equal to 6,000
Common Shares or if the Conversion Rate provided herein is adjusted, to the
maximum number of votes that equal the number of Common Shares to which said
Series B Preferred Shares could be converted, but not less than the adjusted
equivalent to 6,000 shares voting weight of Common Shares for each Share of
Series B Preferred.

            (b) Unless otherwise required by law, Series B Preferred
shareholders and Common shareholders shall vote together on all matters upon
which shareholders are permitted to vote and not as separate classes. In those
cases where Series B Preferred Shareholders are required by law to vote as a
separate class, the vote required by said class for approval of the proposed
action shall be a simple majority of the class.

           (c) Voting rights shall be adjusted in the event of adjustments in
the Conversion Ratio, except that increases or reductions that apply equally to
Series B Preferred Shares and Common Shares shall not cause an adjustment to be
made.

       5. CONVERSION.

The Company and the Holders of Series B Preferred Shares shall have the
following conversion rights:

           (a) Right to Convert. Each share of Series B Preferred Shares shall
be convertible, if there shall be sufficient Common Shares authorized and
issuable therefor at the option of the Holder as follows, (i) none for the 12
month period following issuance to the Holder, unless a greater amount is
approved by the Company; (ii) 5% of the Series B Preferred Shares held by the
Holder may be converted during the twelve month period following the initial
twelve months after issuance to the Holder, unless a greater amount is approved
by the Company; (iii) 10% of the Series B Preferred Shares held by the Holder
may be converted during the twelve month period following the initial
twenty-four months after issuance to the Holder, unless a greater amount is
approved by the Company (iv) all Series B Preferred Shares held by the Holder
may be converted at any time after thirty-six months after issuance to the
Holder, thereof, into fully paid and non assessable shares of Common Stock at
the Conversion Rate set forth in Section 5(c) hereunder (as adjusted). In the
event that a transfer of Series B Preferred Shares subject hereto shall have
occurred, the periods for conversion shall date from the date of issuance to the
initial Holder hereof.

           (b) Automatic Conversion at Election of Company.

                  (1)   Each share of Series B Preferred Shares shall
                        automatically at the election of the Company be
                        converted into shares of Common Stock based on the then
                        effective Conversion Rate set forth in Section 5(c)

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                        hereunder (as adjusted) if any one of the following
                        shall occur: (B) The Holders of 51% of the Series B
                        Preferred Shares outstanding have given notice of
                        election to convert as provided herein in Section 6; (B)
                        The Board of Directors of the Company shall have
                        approved a plan of reorganization, exchange, merger or
                        consolidation to which the Company is a party, or an
                        acquisition of the Company; (C) Immediately upon the
                        closing of an underwritten public offering pursuant to
                        an effective registration statement under the Securities
                        Act of 1933, as amended, with respect to the Common
                        Stock of the Company (including shares registered by
                        selling Series B Preferred shareholders) where the
                        amount of such securities sold is $10,000,000. or more;
                        (D) When the Company shall have a net worth of
                        $10,000,000 or more; (E) After the Common Shares shall
                        have been listed on NASDAQ for a period of not less than
                        three months.

                  (ii)  Upon the occurrence of any of the events specified in
                        paragraph 5(b)(i) and the election (if applicable) being
                        so made by the Company, the outstanding shares of Series
                        B Preferred Shares shall be converted automatically
                        without any further action by the Holders of such Series
                        B Preferred Shares and whether or not the certificates
                        representing such Series B Preferred Shares are
                        surrendered to the Company or its transfer agent;
                        provided however, that the Company shall not be
                        obligated to issue certificates evidencing the shares of
                        Common Stock issuable upon the conversion unless the
                        certificates evidencing such Series B Preferred Shares
                        are either delivered to the Company or its transfer
                        agent, or the Holder notifies the Company or its
                        transfer agent that such certificate have been lost,
                        stolen or destroyed and executes an agreement
                        satisfactory to the Company to indemnify the Company
                        from any loss incurred by it in connection with such
                        certificates. The conversion shall be deemed to have
                        occurred immediately prior to the business day on which
                        the Series B certificates are to be surrendered, and the
                        person entitled to receive the Common shares upon such a
                        conversion shall be deemed a Common Shareholder of
                        record as of that date.

            (c) Conversion Rate, adjustments. Except as provided elsewhere
herein for adjustment of conversion based on share price, recapitalization or
other factors, the Conversion Rate is 1000 Common Shares for One Series B
Preferred Share. The Conversion Rate shall be subject to adjustment from time to
time as provided below; no adjustment shall apply after a Series B Preferred
Share has been converted.

           (d) Mechanics of Conversion. Each Holder of Series B Preferred Shares
who desires to convert the same into shares of Common Stock shall surrender the
certificate, duly endorsed, at the office of the Company or of any transfer
agent for the Series B Preferred Shares or Common Stock, and shall give written
notice to the Company at such office that such Holder elects to convert the same
and shall state therein the number of

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shares of Series B Preferred Shares being converted. Thereupon the Company shall
promptly issue and deliver to such Holder a certificate or certificates for the
number of shares of Common Stock to which such Holder is entitled. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the certificate representing the
Series B Preferred Shares 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.

           (e) Adjustment for Stock Splits and Combinations. If the Company at
any time or from time to time effects a subdivision of the outstanding Common
Stock, the Conversion Rate then in effect immediately before that subdivision
shall be proportionately increased, and conversely, if the Company at any time
or from time to time combines the outstanding shares of Common Stock into a
smaller number of shares, the Conversion Rate then in effect immediately before
the combination shall be proportionately decreased. Any adjustment under this
subsection (e) shall become effective at the close of business on the date the
subdivision or combination becomes effective. Subdivisions or combinations of
Series B Preferred Shares shall be similarly considered to compute the final
adjustment to the Conversion Rate to reflect stock splits and combinations.

           (f) Adjustments for Reclassification, Exchange and Substitution. In
the event that at any time or from time to time, the Common Stock issuable upon
the conversion of the Series B Preferred Shares 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 a subdivision or
combination of shares or stock dividend or a reorganization, merger, exchange of
shares, or sale of assets, provided for elsewhere in this Section), then and in
any such event each Holder of Series B Preferred Shares shall have the right
thereafter to convert such stock into the kind and the maximum amount of stock
and other securities and property receivable upon such recapitalization,
reclassification or other change, by Holders of shares of Common Stock into
which such shares of Series B Preferred Shares could have been converted
immediately prior to such recapitalization, reclassification or change, all
subject to further adjustment as provided herein.

           (g) Reorganizations, Mergers, Consolidations or Sales of Assets. If
at any time or from time to time there is a capital reorganization of the Common
Stock (other than a recapitalization, subdivision, combination, reclassification
or exchange of shares provided for elsewhere in this Section) or a merger or
exchange of shares of the Company with or into another corporation, or the sale
of all or substantially all of the Company's properties and assets to any other
person, then as a part of such reorganization, merger, consolidation or sale,
provision shall be made so that the Holders of the Series B Preferred Shares
shall have the right thereafter to convert such stock into the number of shares
of stock or other securities or property to which a Holder of the number of
shares of Common Stock deliverable upon conversion would have been entitled on
such capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment

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shall be made in the application of the provisions of this Section with respect
to the right of the Holders of the Series B Preferred Shares after the
reorganization, merger, consolidation or sale to the end that the provisions of
this Section (including adjustment of the Conversion Rate then in effect and the
number of shares receivable upon conversion of the Series B Preferred Shares)
shall be applicable after that event and be as nearly equivalent as may be
practicable.

           (h)  Sale of Common Shares Below $.33 per Share.


           (i) If at any time or from time to time, the Company issues or sells,
or is deemed by the express provisions of this subsection (i) to have issued or
sold, additional shares of Common Stock (as hereinafter defined), for an
effective price (as hereinafter defined) that is less than $.33 Share (or as
adjusted after application of adjustments provided in sections (e),(f),(g)
hereabove), then in addition to any other adjustments provided herein and in
each such case the then existing Conversion Rate shall be increased, the
increase being computed to reflect the proportionate decrease in price over all
of the previously existing Common Shares such lower price would produce. Thus,
if (before any other adjustments provided herein) there were 10,000,000 Shares
of Common Stock outstanding and 1,000,000 Common Shares were sold at $.20/share,
the 10,000,000 Common Shares would be valued at $.33/share ($3,300,000), plus
the 1,000,000 Common Shares newly sold at $200,000, and the result, 11,000,000
Common Shares would be divided into $3,500,000. The resultant difference between
such number and $.33 per Common Share would be the basis to adjust the
Conversion Rate to reflect the dilution.

           (ii) For the purpose of making any adjustment required under
subsection 5(h)(i), the consideration received by the Company for any issue or
sale of securities shall (aa) to the extent it consists of cash be computed at
the amount of cash for which the securities are sold, (bb) to the extent it
consists of property other than cash, be computed at the fair value of that
property as determined in good faith by the Board.



           (i) Fractional Shares. Series B Preferred Shares may be issued in
fractional amounts.

           (j) Reservation of Stock Issuable Upon Conversion. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series B Shares, 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 Series B Preferred Shares that shall be convertible at
that time; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series B Preferred Shares, the Company will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be
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sufficient for such purpose. Should this action require the affirmative vote of
the Holders of Series B Preferred Shares, whether as a Class or voted with
Common Shares, said Holders of Series B Preferred Shares shall be deemed solely
for this purpose to have consented thereto, and shall be deemed to irrevocably
constituted management of the Company as their proxy and attorney in fact solely
for this purpose to execute such documents as may be required to effect this
consent.


           (k) Adjustment Based on Market Success.

           (i) In the event that Common Shares shall have had an average price
as defined hereunder of $1.00 per Common Share, then for each $.05 over $1.00,
but not over $3.50 per Common Share, then the amount of Common Shares into which
these Series B Preferred Shares may be converted shall increase by 10%. Thus at
$1.00 or less (unless the conversion Rate is otherwise adjusted as provided
above, in which case to reflect the adjusted Conversion Rate), if each Share
hereof would be convertible into 1000 shares of Common Stock, then if the
average price were $1.05 per Common Share, then the conversion would be 1100
shares; and at an average price of $3.50 per Common Share, the conversion would
be 6,000 Common Shares; likewise, if no other adjustment to the Conversion Rate
shall be required, but there shall have been a equivalent reverse split of
Common Shares and Series B Preferred Shares of 25 reduced to 1, then the Common
price at which the Conversion will be increased would increase proportionately,
to a price of $25 per Common share, and for each increase of $1.25 per Common
Share, the Conversion of a Series B Preferred Share would be increased 10%, or
from 1,000 Common Shares to 1,100 Common Shares, to a maximum of 6,000 Common
Shares if the Common Share price shall be $87.50 per Share; likewise, if however
there should have been a two for one stock split for Common and Preferred Series
B Shares, the price at which the conversion would be increased would be $.50,
and there would be an increased conversion of 10% for each $.025 increase in
price.

           (ii) The average price shall be computed by the average between the
bid and ask price of the Common Shares for a period of ten days prior to the
conversion request on such markets as the Common Shares may be regularly traded,
and if there is more than one market, then the average of the markets upon which
75% or more of the Common Shares are traded; if the Common Shares shall not have
been trading during said 10 day period, for regulatory reasons or any other
reason, then the ten day prior period in which such trading did occur, or the
last placement price of $200,000 or more of the Common Shares, or in the event
of an acquisition or merger, the merger or acquisition price, whichever is
higher. The average price shall be adjusted in the event that there shall be
recapitalizations such as a share split. Thus if there should be a reverse share
split of common of 10 to 1, then the price at which an increase in conversion
would occur under section (i) would be $10 per Common Share average price, and
the increments would be $.50, rather than $.05.

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6. REGISTRATION RIGHTS

           (a) At any time after Series B Preferred Shares shall have been
converted into Common Shares at the election of the Company as provided in
Section 5(b) and the Company shall have exercised its right to require
conversion thereunder, or if the Holders of a majority of the Series B Preferred
Shares shall have given notice of election for Conversion as provided in Section
5(a), the Holders of a majority of the Series B Preferred Shares may request
"piggyback' registration of the Common Shares in conjunction with a registration
planned by the Company subject to underwriter approval.

           (b) Upon such a request being made by the Holders of a majority of
the Series B Preferred Shares, the Company will notify all of the remaining
Holders of Series B Preferred Shares as well as all Holders of Common Shares who
shall have previously converted Series B Preferred Shares (but not the successor
thereof if by sale), and they shall be deemed to have requested the registration
and shall be fully subject thereto.

           (c) The Company will use its best efforts to effect a single public
registration on the appropriate form available thereto of all converted shares.
The Company will be under no obligation to secure an underwriter or other seller
for the shares and sales of shares after the registration will be solely the
responsibility of the Holder thereof.

           (d) To the extent required to effect the registration, converting
shareholders shall fully cooperate with the Company and its counsel. Failure to
cooperate will entitle the Company to exclude a Holder from the registration.

7. EFFECT OF ISSUANCE OF OTHER SERIES OF PREFERRED SHARES

            (a)   Nothing contained in this designation of rights shall limit
                  the ability of the Company to authorize and issue other Series
                  of Preferred Shares or other classes of Preferred Shares with
                  rights or preferences that are senior to these Series B
                  Preferred Shares or that limit or reduce the rights or
                  preferences of these Series B Preferred Shares. In the event
                  that other Series or Classes of Preferred Shares are
                  authorized and issued, unless otherwise provided in the
                  designation of rights of said other Series or Classes, these
                  Series B Preferred Shares shall vote on all matters based on
                  the conversion rates adjusted into common shares provided
                  herein, and said such other preferred shares shall have such
                  voting rights as is provided in the designation thereof; thus,
                  if there were 1000 Series B Preferred Shares Issued, they
                  would have the voting rights of 1,000,000 Shares of Common
                  Stock, and if 1000 other preferred shares had voting rights of
                  1,000,000 shares of Common Stock, and there were 10,000,000
                  shares of Common Stock issued and outstanding, then in all
                  votes for the Board of Directors, or any other matters in
                  which shareholders may vote, all Common Shareholders, and all
                  Preferred Shareholders shall vote together, and Preferred
                  Shares would have the weight based on their conversion into
                  common. There shall be no class votes of these
<PAGE>   10

                  Series B Preferred Shares unless said vote is non-waivable and
                  is required by law.


            (b)   Unless otherwise provided in the designation of rights and
                  preferences of other preferred shares, any preferences of
                  these Series B Preferred Shares shall be ratable with other
                  series or classes of Preferred Shares that may be hereafter
                  designated.

8. ASSIGNABLILITY OF  ADJUSTMENTS IN CONVERSION RATE BASED ON MARKET SUCCESS

           Any holder of Series B Preferred Shares may assign or transfer any
right to an increased conversion to Common Shares provided in Section 5(k),
above, without affecting the voting rights of Series B Preferred Shares provided
in Section 4. In the event that a Series B Preferred Shareholder shall elect to
assign or transfer all or a portion of such rights, voting rights of the Series
B Preferred Shares held by such a transferor shall continue to be calculated to
reflect all adjustments to the Conversion Ratio, including adjustments provided
by Section 5(k), notwithstanding the assignment or transfer of the increased
conversion to common Shares provided under Section 5(k) to another person.



Dated this 8th day of October 1998 by:   John Cooper, Jr.
                                         ----------------
                                         John Cooper, Jr.
                                            Secretary