EXHIBIT 4.10



<PAGE>

                           CERTIFICATE OF DESIGNATION
                                  ESTABLISHING
                            SERIES B PREFERRED STOCK
                                       OF
                        KARTS INTERNATIONAL INCORPORATED


         1.       The   name  of  the   Corporation   is   Karts   International
Incorporated, a Nevada corporation (the "Corporation").

         2.       The Board of  Directors  of the  Corporation  duly adopted the
following  resolutions  at a special  meeting of the Board of Directors  held on
September 25, 2000:

                  WHEREAS,   the  Corporation's   directors  have  reviewed  and
         approved the  Designation  of  Preferences,  Limitations  and Rights of
         Series  B   Preferred   Stock  of  Karts   International   Incorporated
         ("Certificate"),  attached hereto as Exhibit A and incorporated  herein
         by  reference,  delineating  the number of shares,  the voting  powers,
         designations,   preferences  and  relative,  participating,   optional,
         redemption,  conversion, exchange, dividend or other special rights and
         qualifications,  limitations or  restrictions  of a series of Preferred
         Stock to be issued by the Corporation and designated Series B Preferred
         Stock, par value $0.001 per share (the "Series B Preferred Stock");

                  RESOLVED,  that  100,000  shares of  authorized  but  unissued
         Preferred  Stock of the  Corporation  be designated  Series B Preferred
         Stock and authorized for issuance and that the Series B Preferred Stock
         have the rights,  preferences,  limitations and  restrictions set forth
         herein.

                  FURTHER RESOLVED, that the Chief Executive Officer,  President
         or any Vice President of the Corporation, individually or collectively,
         and  the   Secretary  or  Assistant   Secretary  of  the   Corporation,
         individually  or  collectively,  be,  and  such  officers  hereby  are,
         authorized  and directed to execute,  acknowledge,  attest,  record and
         file with the  Secretary of State of the State of Nevada a  Certificate
         of Designation in accordance with Section 78.1955 of the Nevada General
         Corporation  Law and to take all other  actions that such officers deem
         necessary to effectuate the  Certificate  of Designation  and establish
         the Series A Preferred Stock.

         3.       The  authorized  number of shares  of  Preferred  Stock of the
Corporation  is  10,000,000,  of which  2,500,000  shares have  previously  been
designated  as  9%  Convertible   Preferred  Stock  and  4,000,000  shares  have
previously   been   designated  as  Series  A  Preferred  Stock  (the  "Existing
Preferred"),  and the number of shares of the Series B Preferred Stock,  none of
which has been issued, is 100,000.

         4.       The  resolutions set forth above have been duly adopted by all
necessary action on the part of the Corporation.


                                       1
<PAGE>

         IN WITNESS WHEREOF,  Karts  International  Incorporated has caused this
Certificate  to be  executed  by Charles  Brister,  President,  this 26th day of
September, 2000.

                                        KARTS INTERNATIONAL INCORPORATED


                                        By: ____________________________________
                                               Charles Brister, President
ATTEST:


By: _____________________________________
    Geoffrey Craig benRichard barAbba,
    Corporate Secretary


STATE OF TEXAS      ss.
                    ss.
COUNTY OF DALLAS    ss.

         The foregoing instrument was acknowledged before me, on the 26th day of
September,  2000, by Charles Brister,  President,  and Geoffrey Craig benRichard
barAbba, Secretary of Karts International Incorporated, a Nevada corporation, on
behalf of the corporation.

         Given under my hand and official seal this 26th day of September, 2000.



                                                ________________________________
                                                Notary Public








                                       2
<PAGE>

              DESIGNATION OF PREFERENCES, LIMITATIONS AND RIGHTS OF
                            SERIES B PREFERRED STOCK
                                       OF
                        KARTS INTERNATIONAL INCORPORATED


         1.       Dividend  Provisions.  The  holders  of  shares  of  Series  B
Preferred Stock shall not be entitled to receive any dividends.

         2.       Liquidation Preference.

         (a) The  preferences,  limitations and rights of the Series B Preferred
Stock is subordinate to the preferences, limitations and rights of the Company's
outstanding  Series A  Preferred  Stock  and pari  passu  with the  preferences,
limitations  and rights of the outstanding 9% Cumulative  Convertible  Preferred
Stock (the  "Convertible  Preferred  Stock").  In the event of any  liquidation,
dissolution or winding up of the Company,  either voluntary or involuntary,  the
holders of Series A Preferred Stock shall first have received  complete  payment
for the  Series A  Preferred  Stock  then  outstanding  as  provided  under  the
Certificate of Designation  Establishing Series A Preferred Stock then in effect
(the  "Series A Preferred  Stock  Certificate")  and  thereafter  the holders of
Series B Preferred  Stock shall be entitled to receive,  prior and in preference
to any distribution of any of the assets of the Company to the holders of common
stock, other than to the holders of the outstanding Series A Preferred Stock, by
reason of their ownership  thereof,  an amount per share equal to the sum of (i)
$75.00 for each outstanding share of Series B Preferred Stock and the holders of
Convertible  Preferred Stock shall be entitled to receive an amount of $1.00 per
share  for each  outstanding  share of  Convertible  Preferred  Stock,  plus all
accrued  and  unpaid  dividends  on each  such  share up to the date  fixed  for
distribution  (subject to  adjustment  of such fixed dollar amount for any stock
splits, stock dividends,  combinations,  recapitalizations or the like). Subject
to the prior  rights of the  holders of the  Series A  Preferred  Stock,  if the
assets and funds thus  distributed  among the  holders of the Series B Preferred
Stock and  Convertible  Preferred  Stock  shall be  insufficient  to permit  the
payment to such holders of the full  aforesaid  preferential  amounts,  then the
available  assets and funds of the Company  legally  available for  distribution
shall be distributed  ratably among the holders of the Series B Preferred  Stock
and Convertible  Preferred Stock in proportion to the full  preferential  amount
each such holder is otherwise entitled to receive under this subsection (a).

         (b) Upon the completion of the distribution  required by subsection (a)
of this Section 2,  including  the  distribution  to the holders of the Series A
Preferred  Stock,  the  remaining  assets  of  this  corporation  available  for
distribution to stockholders  shall be distributed among the holders of Series A
Preferred  Stock  and  Common  Stock pro rata  based on the  number of shares of
Common  Stock  held by each  (assuming  full  conversion  of all  such  Series A
Preferred Stock).  The Series B Preferred Stock and Convertible  Preferred Stock
shall have no further rights to participate in the distribution of the assets of
the Corporation.

         (c)      (i) For purposes of this Section 2, a liquidation, dissolution
or winding up of the Company shall be deemed to be occasioned  by, or to include
(unless the holders of at least a majority of the Series A Preferred  Stock then
outstanding  shall determine  otherwise),  (A) the acquisition of the Company by
another  entity by means of any  transaction  or series of related  transactions
(including,  without limitation,  any  reorganization,  merger or consolidation)
that results in the transfer of fifty percent  (50%) or more of the  outstanding
voting power of the Company;  or (B) a sale of all or  substantially  all of the
assets of the Company.


                               EXHIBIT A - Page 1

<PAGE>

                  (ii) In any of such events, if the  consideration  received by
the Company is other than cash,  its value will be deemed its fair market value.
Any securities shall be valued as follows:

                           (A)  Securities  not subject to investment  letter or
other similar restrictions on free marketability covered by (B) below:

                                    (1) If traded on a  securities  exchange  or
through the Nasdaq  National  Market the value shall be deemed to be the average
of the  closing  prices of the  securities  on such  exchange or system over the
thirty (30) day period ending three (3) days prior to the closing;

                                    (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 thirty (30) day period ending three (3) days
prior to the closing; and

                                    (3) If there is no active public market, the
value shall be the fair market  value  thereof,  as mutually  determined  by the
Company and the  holders of at least a majority of the Series A Preferred  Stock
and Series B Preferred Stock then outstanding.

                           (B) The method of valuation of securities  subject to
investment  letter  or other  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 (A) (1), (2) or (3) to reflect the approximate fair
market value thereof,  as mutually  determined by the Company and the holders of
at least a majority of the Series A Preferred Stock and Series B Preferred Stock
then outstanding.

                  (iii) In the event the  requirements  of this  subsection 2(b)
are not complied with, the Company shall forthwith either:

                           (A) cause  such  closing to be  postponed  until such
time as the requirements of this Section 2 have been complied with; or

                           (B)  cancel  such  transaction,  in which  event  the
rights,  preferences  and  privileges  of the  holders of the Series B Preferred
Stock shall revert to and be the same as such rights, preferences and privileges
existing  immediately  prior  to the date of the  first  notice  referred  to in
subsection 2(c)(iv) hereof.

                  (iv) The Company  shall give each holder of record of Series B
Preferred  Stock written  notice of such  impending  transaction  not later than
twenty  (20) days prior to the  stockholders'  meeting  called to  approve  such
transaction,  or twenty  (20) days  prior to the  closing  of such  transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such  transaction.  The first of such  notices  shall  describe  the
material terms and conditions of the impending transaction and the provisions of
this Section 2, and the Company shall thereafter give such holders prompt notice
of any material  changes.  The  transaction  shall in no event take place sooner
than twenty (20) days after the Company has given the first notice  provided for
herein or sooner than ten (10) days after the  Company  has given  notice of any
material changes provided for herein;  provided,  however, that such periods may
be shortened upon the written  consent of the holders of Series B Preferred that
an entitled to such notice rights or similar notice rights and that represent at
least a majority of the Series B Preferred Stock then outstanding.


                               EXHIBIT A - Page 2

<PAGE>

         3.       Redemption.

         (a) Subject to the prior  written  consent of the holders of at least a
majority of the outstanding  Series A Preferred Stock, on or after May 31, 2003,
the Company may redeem all or a portion of the Series B Preferred  (in multiples
of  $1,000,000),  by paying in cash therefor a sum equal to $150.00 per share of
Series B Preferred  Stock (as adjusted for any stock  splits,  stock  dividends,
recapitalizations  or the like) (the  "Redemption  Price").  Any  redemption  of
Series B Preferred Stock elected  pursuant to this subsection 3(a) shall be made
on a pro rata  basis  among  the  holders  of the  Series B  Preferred  Stock in
proportion  to the number of shares of Series B Preferred  Stock  proposed to be
redeemed by the Company.

         (b) At least thirty (30) but no more than forty-five (45) days prior to
each date on which the Series B Preferred Stock may be redeemed,  written notice
shall be mailed,  first class postage prepaid,  to each holder of record (at the
close of business: on the business day next preceding the day on which notice is
given) of the Series B Preferred Stock to be redeemed, at the address last shown
on the  records of the  Company for such  holder,  notifying  such holder of the
same,  specifying  the  number  of  shares  that  may be  subject  to  any  such
redemption,  the date set for such redemption, the Redemption Price for any such
redemption,  the place at which  payment may be obtained  and calling  upon such
holder to surrender to the Company,  in the manner and at the place  designated,
his,  her, or its  certificate  or  certificates  representing  the shares to be
redeemed (the  "Redemption  Notice").  For purposes hereof the term  "Redemption
Date" shall be deemed to refer to the date set by the Company for a  redemption.
Except as provided in subsection  (3), on or after each  Redemption  Date,  each
holder of Series B Preferred  Stock to be redeemed on such Redemption Date shall
surrender  to the Company the  certificate  or  certificates  representing  such
shares,  in the manner and at the place designated in the Redemption  Notice and
thereupon the applicable Redemption Price of such shares shall be payable to the
order of the person whose name appears on the certificate or certificates as the
owner thereof and each surrendered  certificate shall be canceled.  In the event
less then all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.

         (c) From and after each Redemption Date, unless there shall have been a
default in payment of the Redemption  Price,  all rights of the holder of shares
of Series B Preferred Stock designated for redemption on such Redemption Date in
the Redemption  Notice as holders of Series B Preferred  Stock (except the right
to receive the applicable  Redemption  Price without  interest upon surrender of
their  certificate  or  certificates)  shall cease with respect to such redeemed
shares,  and such shares shall not thereafter be transferred on the books of the
Company or redeemed to be outstanding for any purpose  whatsoever.  If the funds
of the Company legally  available for redemption of shares of Series B Preferred


                               EXHIBIT A - Page 3

<PAGE>

on a Redemption  Date are  insufficient  to redeem the total number of shares of
Series B  Preferred  Stock to be  redeemed  on such date,  those  funds that are
legally  available  will be used to redeem the maximum  possible  number of such
shares  ratably  among the holders of such shares to be redeemed  such that each
holder of a share of Series B Preferred  Stock  receives the same  percentage of
the  applicable  Series B  Redemption  Price,  as the case may be. The shares of
Series B Preferred  Stock not redeemed shall remain  outstanding and entitled to
all the rights and  preferences  provided  herein.  At any time  thereafter when
additional  funds of the Company are legally  available  for the  redemption  of
shares of Series B  Preferred  Stock,  such  funds will  immediately  be used to
redeem the balance of the shares  that the Company has become  obliged to redeem
on any Redemption Date but that it has not redeemed.

         4.       Conversion.  The holders of the Series B Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):

         (a) Right to Convert.  Each share of Series B Preferred  Stock shall be
convertible,  at the option of the holder thereof, at any time after the date of
issuance of such shares into such number of fully paid and nonassessable  shares
of Common Stork as is determined by dividing the  Conversion  Price per share of
such Series B Preferred in effect at the time of conversion into the sum of $75.
The initial  "Conversion Price" per share for shares of Series B Preferred Stock
shall be $0.375;  provided,  however that the Conversion  Price for the Series B
Preferred Stock shall be subject to adjustment as set forth in subsection 4(d).

         (b)  Automatic  Conversion.  Each  share of  Series B  Preferred  shall
automatically  be converted into shares of Common Stock at the Conversion  Price
at that time in effect for such Series B  Preferred  Stock  immediately,  in the
manner  specified  in Section  4(a) above,  upon (i) the  Company's  sale of its
Common Stock with an aggregate  offering  price of  $10,000,000  and a per share
price of $5.00,  and (ii) the written  consent or  agreement of the holders of a
majority of the then outstanding shares of the Series B Preferred Stock.

         (c)  Mechanics of  Conversion.  Before any holder of Series B Preferred
Stock shall be entitled to convert the same into shares of Common  Stock,  he or
she shall surrender the certificate or certificates therefor,  duly endorsed, at
the office of the  Company or of any  transfer  agent for the Series B Preferred
Stock,  and shall give written notice to the Company at its principal  corporate
office,  of the election to convert the same and shall state them in the name or
names in which the certificate or certificates for shares of Common Stock are to
be issued.  The Company  shall,  as soon as  practicable  thereafter,  issue and
deliver at such  office to such holder of Series B  Preferred  Stock,  or to the
nominee or nominees of such holder, a certificate or certificates for the number
of shares of Common Stock to which such holder  shall be entitled as  aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of  business on the date of such  surrender  of the shares of Series B Preferred
Stock to be converted, and the person or persons entitled to receive the. shares
of Common Stock issuable upon such conversion  shall be treated for all purposes
as the record holder or holders of such shares of Common Stock as of such date.


                               EXHIBIT A - Page 4

<PAGE>

         (d)  Conversion  Price.  Adjustments  of  Preferred  Stock for  Certain
Dilutive Issuances, Splits and Combinations.  The Conversion Price of the Series
B Preferred Stock shall be subject to adjustment from time to time as follows:

                  (i)      (A)   If the Company shall  issue after the date upon
which any shares of Series B Preferred  Stock are first  issued  pursuant to the
Stock  Purchase  Agreement,  any  Additional  Stock (as defined  below)  without
consideration  or for a consideration  per share less than the Conversion  Price
for the Series B Preferred Stock in effect  immediately prior to the issuance of
such Additional  Stock, the Conversion Price for the Series B Preferred Stock in
effect  immediately  prior to each such  issuance  shall  forthwith  (except  as
otherwise provided in this clause (i)) be adjusted to a price equal to the price
paid per share for such Additional Stock.

                           (B) No  adjustment  of the  Conversion  Price for the
Series B  Preferred  Stock  shall be made in an  amount  less  than one cent per
share,  provided that any adjustments that are not required to be made by reason
of this sentence shall be carried forward and shall be either taken into account
in any subsequent  adjustment made prior to three (3) years from the date of the
event giving rise to the adjustment being carried  forward,  or shall be made at
the end of  three  (3)  years  from  the date of the  event  giving  rise to the
adjustment being carried  forward.  Except to the limited extent provided for in
subsections  (E)(3) and (E)(4),  no adjustment of such Conversion Price pursuant
to this  subsection  4(d)(i) shall have the effect of increasing  the Conversion
Price above the Conversion Price in effect immediately prior to such adjustment.

                           (C) In the case of the  issuance of Common  Stock for
cash, the  consideration  shall be deemed to be the amount of cash paid therefor
before  deducting  any  reasonable  discounts,  commissions  or  other  expenses
allowed,  paid or incurred by the Company for any  underwriting  or otherwise in
connection with the issuance and sale thereof

                           (D) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration  other than
cash shall be deemed to be the fair value  thereof as determined by the Board of
Directors and a majority of the shares of Series B Preferred Stock, irrespective
of any accounting treatment.

                           (E) In the case of the issuance  (whether before,  on
or after the  applicable  Purchase  Date) of  options to  purchase  or rights to
subscribe  for Common  Stock,  securities  by their  terms  convertible  into or
exchangeable  for Common Stock or options to purchase or rights to subscribe for
such  convertible or exchangeable  securities,  the following  provisions  shall
apply for all purposes of this subsection 4,(d)(i) and subsection 4(d)(ii):

                                    (1) The aggregate  maximum  number of shares
of Common Stock  deliverable  upon exercise (to the extent then  exercisable) of
such options to purchase or rights to subscribe for Common Stock shall be deemed
to have been  issued at the time such  options or rights  were  issued and for a
consideration  equal to the consideration  (determined in the manner provided in
subsections 4(d)(j)(C) and (d)(i)(D)),  if any, received by the Company upon the
issuance of such options or rights plus the minimum  exercise  price provided in
such  options or rights  (without  taking into  account  potential  antidilution
adjustments) for the Common Stock covered thereby.


                               EXHIBIT A - Page 5

<PAGE>

                                    (2) The aggregate  maximum  number of shares
of Common Stock  deliverable  upon  conversion of, or in exchange (to the extent
then  convertible or  exchangeable)  for, any such  convertible or  exchangeable
securities  or upon the  exercise of options to purchase or rights to  subscribe
for such  convertible or exchangeable,  securities and subsequent  conversion or
exchange thereof shall be deemed to have been issued at the time such securities
were issued or such options or rights were issued and for a consideration  equal
to the  consideration,  if any,  received by the Company for any such securities
and related options or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus their minimum additional consideration.  if
any,  to be  received by the Company  (without  taking  into  account  potential
antidilution  adjustments) upon the conversion or exchange of such securities or
the exercise of any related options or rights (the consideration in each case to
be determined in the manner provided in subsections 4(d)(i)(C) and (d)(i)(D)).

                                    (3) In the event of any change in the number
of shares of Common Stock  deliverable  or in the  consideration  payable to the
Company  upon  exercise of such  options or rights or upon  conversion  of or in
exchange for such  convertible or exchangeable  securities,  including,  but not
limited to, a change resulting from the  antidilution  provisions  thereof,  the
Conversion  Price of the  Series B  Preferred  Stock,  to the  extent in any way
affected by or  computed  using such  options,  rights or  securities,  shall be
recomputed to reflect such change,  but no further  adjustment shall be made for
the actual  issuance of Common Stock or any payment of such  consideration  upon
the exercise of any such options or rights or the conversion or exchange of such
securities.

                                    (4) Upon the  expiration of any such options
or rights,  the  termination  of any such  rights to convert or  exchange or the
expiration of any options or rights related to such  convertible or exchangeable
securities the Conversion  Price of the Series B Preferred  Stock, to the extent
in any way affected by or computed  using such options,  rights or securities or
options or rights related to such securities, shall be recomputed to reflect the
issuance  of only the  number  of shares of Common  Stock  (and  convertible  or
exchangeable securities that remain in effect) actually issued upon the exercise
of such options or rights, upon the conversion or exchange of such securities or
upon the exercise of the options or rights related to such securities.

                                    (5) The  number of  shares  of Common  Stock
deemed issued and the consideration deemed paid therefor pursuant to subsections
4(d)(i)(E)(I)  and (2) shall be  appropriately  adjusted  to reflect any change,
termination   or  expiration  of  the  type   described  in  either   subsection
4(d)(i)(E)(3) or (4).

                           (ii)  "Additional  Stock"  shall  mean  any  share of
Common  Stock  issued  (or deemed to have been  issued  pursuant  to  subsection
4(d)(j)(E))  by the Company  after  September  26, 2000 (the  "Initial  Purchase
Date"), other than:

                                    (A)  Common  Stock  issued   pursuant  to  a
transaction described in subsection 4(d)(iii) hereof, or


                               EXHIBIT A - Page 6

<PAGE>

                                    (B) up to an aggregate  of 1,000,000  shares
of Common Stock issuable to employees, consultants,  directors or vendors (if in
transactions with primarily  non-financing  purposes) of the Company directly or
pursuant to options  currently  outstanding as of the date of the filing of this
Certificate of Designation  and issued  pursuant to the 1998 Stock  Compensation
Plan of the  Company  as it exists on the  Initial  Purchase  Date and any other
Stock  Compensation Plan of the Company approved after the Initial Purchase Date
by the holders of at least a majority  of the then  outstanding  voting  capital
stock of the Company;

                                    (C) Common  Stock  issued or  issuable  upon
conversion of the  Convertible  Preferred  Stock,  Series A Preferred  Stock and
Series B Preferred Stock;

                                    (D) Common Stock issued upon the exercise of
any warrant or convertible security of the Company outstanding as of the date of
the filing of this Certificate of Designation;

                                    (E) The issuance of securities in connection
with a bona fide business  acquisition of or by the Company,  whether by merger,
consolidation, sale of assets, sale or exchange of stock or otherwise; and

                                    (F) Common  Stock  issued as a  dividend  on
outstanding Preferred Stock as it exists on the Initial Purchase Date.

                           (iii) In the event the Company  should at any time or
from time to time  after the  Initial  Purchase  Date fix a record  date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or the  determination  of holders of Common Stock entitled to receive a dividend
or other  distribution  payable in  additional  shares of Common  Stock or other
securities  or rights  convertible  into,  or  entitling  the holder  thereof to
receive directly or indirectly,  additional shares of Common Stock  (hereinafter
or  referred  to  as  "Common  Stock   Equivalents")   without  payment  of  any
consideration  by such holder for the  additional  shares of Common Stock or the
Common  Stock  Equivalents  (including  the  additional  shares of Common  Stock
issuable upon conversion or exercise thereof),  then, as of such record date (or
the date of such dividend  distribution,  split or subdivision if no record date
is  fixed),  the  Conversion  Price of the  Series B  Preferred  Stock  shall be
appropriately decreased so that the number of shares of Common Stock issuable on
conversion  of each share of Series B  Preferred  Stock  shall be  increased  in
proportion  to  such  increase  of the  aggregate  of  shares  of  Common  Stock
outstanding  and those  issuable  with respect to such Common Stock  Equivalents
with the number of shares  issuable  with  respect to Common  Stock  Equivalents
determined  from time to time in the manner  provided  for deemed  issuances  in
subsection 4(d)(i)(E).

                           (iv)  If  the  number  of  shares  of  Common   Stock
outstanding  at any  time  after  the  Initial  Purchase  Date is  decreased  by
combination  of the  outstanding  shares of Common  Stock,  then,  following the
record date of such combination, the Conversion Price for the Series B Preferred
Stock shall be  appropriately  increased  so that the number of shares of Common
Stock issuable on conversion of each share of Series B Preferred  Stock shall be
decreased  in  proportion  to such  decrease  in  outstanding  shares  and those
issuable with respect to such Common Stock Equivalents with the number of shares
issuable with respect to Common Stock  Equivalents  determined from time to time
in the manner provided for deemed issuances in subsection 4(d)(i)(E).


                               EXHIBIT A - Page 7

<PAGE>

         (e)  Other  Distributions.  In the event the  Company  shall  declare a
distribution  payable in securities of other persons,  evidences of indebtedness
issued by the Company or other persons,  assets  (excluding  cash  dividends) or
options or rights not referred to in  subsection  4(d)(iii),  then, in each such
case for the  purpose  of this  subsection  4(e),  the  holders  of the Series B
Preferred  Stock  shall  be  entitled  to a  proportionate  share  of  any  such
distribution  as though  they were the holders of the number of shares of Common
Stock of the  Company  into which their  shares of Series B Preferred  Stock are
convertible as of the record date fixed for the  determination of the holders of
Common Stock of the Company entitled to receive such distribution.

         (f) Recapitalizations.  If at any time or from time to time there shall
be a recapitalization of the Common Stock (other than a subdivision, combination
or merger or sale of assets transaction provided for elsewhere in this Section 4
or  Section  2)  provision  shall be made so that the  holders  of the  Series B
Preferred  Stock shall  thereafter be entitled to receive upon conversion of the
Series B Preferred  Stock the number of shares of stock or other  securities  or
property  of the  Company  or  otherwise,  to which a  holder  of  Common  Stock
deliverable upon conversion  would have been entitled on such  recapitalization.
In any such case, appropriate adjustment shall be made in the application of the
provisions  of this  Section 4 with  respect to the rights of the holders of the
Series  B  Preferred  Stock  after  the  recapitalization  to the end  that  the
provisions of this Section 4 (including  adjustment of the Conversion Price then
in effect and the number of shares  purchasable  upon conversion of the Series B
Preferred Stock) shall be.  applicable after that event as nearly  equivalent as
may be practicable,

         (g) No Impairment. The Company will not by amendment of its Articles of
Incorporation,  this  Certificate of Designation or through any  reorganization,
recapitalization,  transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action,  avoid or seek to avoid the
observance  or  performance  of any of the  terms to be  observed  or  performed
hereunder  by the  Company,  but will at all times in good  faith  assist in the
carrying  out of all the  provisions  of this Section 4 and in the taking of all
such action a may be necessary or appropriate in order to protect the conversion
rights of the holders of the Series B Preferred Stock against impairment.

         (h) No Fractional Shares and Certificate as to Adjustments.

                  (i) No fractional  shares shall be issued upon the  conversion
of any share or shares of the Series B Preferred Stock, and the number of shares
of Common  Stock to be issued  shall be  rounded  to the  nearest  whole  share.
Whether or not  fractional  shares are issuable  upon such  conversion  shall be
determined  on the basis of the total  number of shares;  of Series B  Preferred
Stock the holder is at the time  converting  into Common Stock and the number of
shares of Common Stock issuable upon such aggregate conversion.

                  (ii) Upon the occurrence of each adjustment or readjustment of
the Conversion Price of Series B Preferred Stock pursuant to this Section 4, the
Company, at its expense,  shall promptly compute such adjustment or readjustment
in accordance  with the,  terms hereof and prepare and furnish to each holder of
Series  B  Preferred  Stock a  certificate  setting  forth  such  adjustment  or
readjustment  and  showing in detail the facts  upon  which such  adjustment  or
readjustment is based.  This Company shall, upon the written request at any time
of any holder of Series B Preferred  Stock,  furnish or cause to be furnished to
holder a like certificate setting forth (A) such adjustment and readjustment (B)
the  Conversion  Price for such series of Preferred  Stock at the time in effect
and (C) the number of shares of Common  Stock and the  amount,  if any, of other
property  that at the time would be received  upon the  conversion of a share of
Series B Preferred Stock.


                               EXHIBIT A - Page 8

<PAGE>

         (i) Notices of Record  Date.  In the event of any taking by the Company
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,  any right to subscribe for,  purchase or otherwise acquire
any  shares of stock of any class or any other  securities  or  property,  or to
receive  any other  right,  the  Company  shall mail to each  holder of Series B
Preferred Stock, at least twenty (20) days prior to the date specified  therein,
a notice  specifying  the date on which  any such  record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or tight.

         (j) Reservation of Stock Issuable Upon Conversion. The Company shall as
soon as practicable  after the filing of this  Certificate with the Secretary of
the State of Nevada seek  approval of its  shareholders  for an amendment to the
Company's  Articles of Incorporation  increasing the authorized shares of Common
Stock of the Company  from  35,000,000  shares to at least 50 million  shares of
Common  Stock and  thereafter  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 affecting the  conversion of the shares of the Series B 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 Series B
Preferred Stock; 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  Stock,  in addition to such other
remedies  as shall be  available  to the  holder of such  Preferred  Stock,  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  sufficient  for such  purposes,  including,
without limitation, engaging in best efforts to obtain the requisite shareholder
approval of any necessary amendment to this Certificate of Designation.

         (k) Notices. Any notice required by the provisions of this Section 4 to
be given to the  holders of shares of Series B  Preferred  Stock shall be deemed
given if deposited in the United States mail, postage prepaid,  and addressed to
each holder of record at his address appearing on the books of the Company.

         5.       Voting Rights.

         (a)  General  Voting  Rights.  The  holder  of each  share of  Series B
Preferred  Stock Shall have the right to one vote for each share of Common Stock
into which such  Series B  Preferred  Stock  could then be  converted,  and with
respect to such vote, such holder shall have full voting rights and powers equal
to the voting  rights and powers of the  holders of Common  Stock,  and shall be
entitled,  not withstanding any provision  hereof,  to notice of any stockholder
meeting in accordance  with the bylaws of the Company,  and shall be entitled to
vote,  together with holders of Common Stock,  with respect to any question upon
which  holders of Common  Stock have the right to vote.  Fractional  votes shall
not,  however,  be permitted and any  fractional  voting rights  available on an
as-converted  basis (after  aggregating all shares into which shares of Series B
Preferred Stock held by each holder could be converted)  shall be rounded to the
nearest whole number (with one-half being rounded upward).


                               EXHIBIT A - Page 9

<PAGE>

         (b) Voting  for the  Election  of  Directors.  The  holders of Series B
Preferred  Stock and Common Stock (voting  together as a single class and not as
separate  series,  and on an as-converted  basis) shall be entitled to elect the
directors  of the  Company;  provided,  however for so long as a majority of the
shares of Series A Preferred Stock  originally  issued remain  outstanding,  the
holders of such shares of Series A Preferred  Stock shall be entitled to elect a
majority of the  directors of the Company at each annual  election of directors;
provided,  further  however  for so long as a majority of the shares of Series A
Preferred Stock originally issued remain  outstanding,  if additional  directors
are  elected  to the  Board  of  Directors  by  the  holders  of  the  Company's
outstanding  Convertible Preferred Stock pursuant to that certain Certificate of
Designation, Preferences and Rights of 9% Cumulative Convertible Preferred Stock
adopted by the Board of Directors of the Company on March 25, 1999,  the holders
of such  shares of Series A  Preferred  Stock  shall be  entitled  to elect such
additional  directors  as shall be necessary to maintain a majority of directors
on the Board of Directors of the Company.

         In the case of any vacancy  (other than a vacancy caused by removal) in
the office of a director occurring among the directors elected by the holders of
a class  or  series  of stock  pursuant  to this  Section  5(b),  the  remaining
directors  so  elected  by that  class or series  may be  affirmative  vote of a
majority  thereof (or the remaining  director so elected if there be but one, or
if there am no such directors remaining,  by the affirmative vote of the holders
of a majority  of the  shares of that class or  series),  elect a  successor  or
successors  to hold office for the  unexpired  term of the director or directors
whose place or places shall be vacant.  Any director who shall have been elected
by the holders of a class or series of stock or by any  directors  so elected as
provided in the immediately  preceding sentence hereof may be removed during the
aforesaid  term of office,  either with or without  cause,  by, and only by, the
affirmative  vote of the  holders  of the shares of the class or series of stock
entitled to elect such director or directors,  given either at a special meeting
of such  stockholders  duly  called for that  purpose or  pursuant  to a written
consent of  stockholders,  and any vacancy  thereby created may be filled by the
holders of that class or series of stock  represented at the meeting or pursuant
to unanimous written consent.

         6.       Protective  Provisions.  So long as any  shares  of  Series  B
Preferred Stock are outstanding,  the Company shall. not without first obtaining
the approval (by vote or written consent,  as provided by law) of the holders of
at least a majority of the then outstanding shares of Series B Preferred Stock:

         (a) alter or change the rights, preferences or privileges of the shares
of Series B Preferred Stock;


                              EXHIBIT A - Page 10

<PAGE>

         (b) authorize to issue, or obligate  itself to issue,  any other equity
security,  including any other security  convertible into or exercisable for any
equity  security,  having a  preference  over the Series B Preferred  Stock with
respect to liquidation, redemption or voting;

         (c) redeem, purchase or otherwise acquire (or pay into or set aside for
a sinking fund for such purpose) any share or shares of Series B Preferred Stock
or Common Stock; provided, however, that this restriction shall not apply to (A)
the repurchase of shares of Common Stock from  employees,  officers,  directors,
consultants  or  other  persons  performing  services  for  the  Company  or any
subsidiary  pursuant  to  agreements  under  which the Company has the option to
repurchase such shares at cost or at cost upon the occurrence of certain events,
such as the  termination  of  employment  or (B) the  redemption of any share or
shares of Series A  Preferred  Stock or Series B Preferred  Stock in  accordance
with Section 3;

         (d)  authorize any dividend or other  distribution  (other than a stock
dividend)  with  respect to any  capital  stock of the  Company,  other than the
dividends  payable  to the  holders of the  Series A  Preferred  Stock or to the
holders  of the  Convertible  Preferred  Stock  outstanding  on the date of this
resolution.

         (e) merge into or consolidate with any other corporation  (other than a
wholly-owned  subsidiary  corporation)  or effect any  transaction  or series of
related  transactions in which more than fifty percent (50%) of the voting power
of this corporation is disposed of if the Company shall have caused the Series B
Preferred Stock to remain  outstanding  after the merger or consolidation and be
convertible  into the same  consideration  received by the holders of the Common
Stock in the merger or consolidation;

         (f) increase or decrease  (other than by redemption or conversion)  the
total number of authorized shares of Series B Preferred Stock; or

         (g) amend the Company's Articles of Incorporation or bylaws.

         7.       Status of Redeemed or Converted  Stock. All shares of Series B
Preferred  Stock  acquired  by the  Company by reason of  redemption,  purchase,
conversion  or  otherwise  shall be  retired  and  canceled  promptly  after the
acquisition  thereof.  All such  shares  shall  upon their  cancellation  become
authorized,  unissued  shares of  undesignated  preferred  stock  available  for
issuance by the Company.





                              EXHIBIT A - Page 11