EXHIBIT 3.7


                 AMENDED AND RESTATED ARTICLES OF INCORPORATION
                                       OF
                              VALUESTAR CORPORATION


FIRST:  The name of the corporation is VALUESTAR CORPORATION.

SECOND:  The corporation shall have perpetual existence.

THIRD:   A.       AUTHORIZED CAPITAL.  The aggregate number of shares of capital
stock of all classes which the Corporation  shall have authority to issue is Two
Hundred Ten MILLION  (210,000,000),  of which Two Hundred MILLION  (200,000,000)
shares  having a par value of $0.00025 per share shall be of a class  designated
"Common Stock" (or "Common Shares"),  and TEN MILLION (10,000,000) shares having
a par value of $0.00025 per share shall be a class designated  "Preferred Stock"
(or "Preferred Shares").  All shares of the Corporation shall be issued for such
consideration  or  considerations  as the Board of Directors of the  Corporation
("Board of Directors") may from time to time determine.

         B.       PREFERRED STOCK.

                  General.  The  designations  and the powers,  preferences  and
rights,  and the  qualifications,  limitations or  restrictions of the Preferred
Stock,  the  establishment  of  different  series of  Preferred  Stock,  and the
variations in the relative  rights and preferences as between  different  series
shall be established  by the Board of Directors in accordance  with the Colorado
Business  Corporation  Act.  Except for such voting  powers with  respect to the
election of directors or other  matters as may be stated in the  resolutions  of
the Board of Directors  creating any series of Preferred  Stock, or as otherwise
provided  herein,  the  holders of any such  series  shall have no voting  power
whatsoever.  Holders of  Preferred  Stock  shall not have the right to  cumulate
their votes in the election of  directors  except to the extent those rights are
specifically  granted in  resolutions  of the Board of  Directors  creating  any
series of Preferred Stock.

                  Series  Previously  Created.  This  Corporation has previously
designated  four series of its Preferred  Stock  referred to herein as "Series A
Stock," "Series B Stock," "Series C Stock," and "Series CC Stock," as follows:

                  On July 21,  1999,  the  Board  of  Directors  designated  ONE
MILLION (1,000,000) shares of Preferred Stock as "SERIES A CONVERTIBLE PREFERRED
STOCK" (also referred to herein as "Series A Stock").

                  On December 7, 1999, the Board of Directors  designated  EIGHT
HUNDRED  THOUSAND  (800,000)  shares of Preferred Stock as "SERIES B CONVERTIBLE
PREFERRED STOCK" (ALSO REFERRED TO HEREIN AS "Series B Stock").

                  On September 14, 2000,  the Board of Directors  designated ONE
MILLION  THREE  HUNDRED   THIRTY-THREE   THOUSAND  THREE  HUNDRED   THIRTY-THREE
(1,333,333) shares of Preferred Stock as "SERIES C CONVERTIBLE  PREFERRED STOCK"
(also  referred  to herein as "Series C Stock")  of which  238,469  shares  were
issued.  All of the  issued  shares of  Series C Stock  have  subsequently  been
returned to the Corporation and cancelled,  and which  cancellation  reduced the
total number of shares of  authorized  preferred  stock prior to the adoption of
these amended and restated articles of incorporation.

                  On January 5, 2001,  the Board of  Directors  designated  FIVE
HUNDRED  THOUSAND  (500,000) shares of Preferred Stock as "SERIES CC CONVERTIBLE
PREFERRED STOCK" (also referred to herein as "Series CC Stock").

                  As a result of the foregoing,  as of the date of these amended
and restated articles of incorporation, there are 10,000,000 shares of Preferred
Stock authorized, including 1,000,000 shares constituting the Series A Stock, of
which 225,000 shares are issued and outstanding, 800,000 shares constituting the
Series B Stock,  of which


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688,586 shares are issued and outstanding and 500,000 shares of Series CC Stock,
of which 192,739  shares are issued and  outstanding,  with  preferences  as set
forth in the following paragraphs.

                  Preferences of Series A Stock,  Series B Stock,  and Series CC
Stock.  The voting  powers,  preferences,  optional or other special  rights and
qualifications,  limitations or restrictions of the Series A Stock, the Series B
Stock and the Series CC Stock shall be as follows:

                  1.       DIVIDENDS.

                           (A)      GENERALLY.

                                    (I) Each  holder  of  outstanding  shares of
Series A Stock shall be  entitled to receive,  when and if declared by the Board
of  Directors  and  out of any  funds  legally  available  therefor,  cumulative
dividends  at the  annual  rate of $0.80 per share (the  "Series A  Preferential
Dividend"),  accruing  quarterly  at  the  end of  each  calendar  quarter,  and
compounded  annually,  whether or not earned or  declared,  payable in shares of
Series A Stock at the rate of one share for each $10.00 of such accrued Series A
Preferential  Dividend  during  each  fiscal  year  of the  Corporation,  and in
preference to any declaration or payment (payable other than in Common Stock) on
Common Stock, Series B Stock or Series CC Stock..

No cash  dividends  shall be declared  and paid on the Common Stock or any other
equity security of the Corporation  that is not by its terms expressly senior to
the Series A Stock as to the payment of  dividends  unless a like cash  dividend
amount  has  been  paid  to  the  Series  A  Stock  on  an as  converted  basis.
Notwithstanding anything to the contrary hereunder, however, upon the conversion
of any share of Series A Stock, all such Series A Preferential  Dividend accrued
thereon  shall  be paid  upon  such  conversion  whether  or not  such  Series A
Preferential Dividend has been declared by the Board of Directors.

                                    (II)  Subject to the  preferential  dividend
rights of the holders of the Corporation's Series A Stock and the holders of any
other series of Preferred  Stock that,  by its terms,  is senior to the Series B
Stock as to the  payment of  dividends,  each  holder of  outstanding  shares of
Series B Stock shall be  entitled to receive,  when and if declared by the Board
of Directors and out of any funds  legally  available  therefor,  non-cumulative
dividends  at the  annual  rate of $1.40 per share (the  "Series B  Preferential
Dividend"),  and in preference to any declaration or payment (payable other than
in Common Stock) of dividends with respect to the Common Stock.

No cash  dividends  shall be declared  and paid on the Common Stock or any other
equity  security  of the  Corporation  except  the  Series A Stock and any other
series of Preferred Stock created that is by its terms  expressly  senior to the
Series B Stock as contemplated above unless a like cash dividend amount has been
paid to the Series B Stock on an as converted basis.

                                    (III) Subject to the  preferential  dividend
rights of the holders of the  Corporation's  Series A Stock,  Series B Stock and
any other series of Preferred  Stock that, by its terms, is senior to the Series
CC Stock as to the payment of dividends,  each holder of  outstanding  shares of
Series CC Stock shall be entitled to receive,  when and if declared by the Board
of  Directors  and  out of any  funds  legally  available  therefor,  cumulative
dividends  at the annual  rate of $3.60 per share (the  "Series CC  Preferential
Dividend"),  and in preference to any declaration or payment (payable other than
in Common Stock) of dividends with respect to the Common Stock.

No cash  dividends  shall be declared  and paid on the Common Stock or any other
equity security of the Corporation except the Series A Stock, Series B Stock and
any other  series of  Preferred  Stock  created  that is by its terms  expressly
senior to the Series CC Stock as contemplated  above unless a like cash dividend
amount has been paid to the Series CC Stock on an as converted basis.

                           (b) PAYMENT OTHER THAN CASH. If the Corporation shall
declare  a  distribution  payable  in  securities  of  persons  other  than  the
Corporation,  evidences  of  indebtedness  issued  by the  Corporation  or other
persons,  assets (excluding cash dividends) or options or rights to purchase any
such  securities  or evidences of


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indebtedness,  then, in each such case, the holders of Series A Stock,  Series B
Stock and Series CC Stock shall be entitled to a proportionate share of any such
distribution  as though the holders of such Preferred  Stock were the holders of
the  number of  shares  of Common  Stock of the  Corporation  into  which  their
respective shares of Preferred Stock are convertible as of the record date fixed
for the  determination of the holders of Common Stock of the Corporation who are
entitled to receive such distribution.

                           (C) DIVIDEND  ADJUSTMENT.  The Series A  Preferential
Dividend,  the Series B  Preferential  Dividend  and the Series CC  Preferential
Dividend shall each be appropriately  adjusted for any stock splits,  dividends,
combinations, recapitalizations and the like ("Appropriately Adjusted").

                           (D) FURTHER SERIES.  Notwithstanding  anything in the
foregoing,  the Board of Directors has the  authority  pursuant to the foregoing
and to the Colorado  Business  Corporation  Act to create  additional  series of
Preferred Stock that are (as to the payment of dividends)  senior to, junior to,
or in pari passu with any authorized  series of Preferred  Stock,  including the
Series A  Stock,  the  Series  B Stock,  the  Series  CC  Stock  and any  series
authorized  hereafter  except to the extent the resolutions  creating any series
authorized hereafter specifically prohibits the creation of any series senior to
or in pari passu with such series as to the payment of dividends  (whether  such
dividends are payable in cash or other than cash).

                  2.       PREFERENCE ON LIQUIDATION.

                           (A)  PREFERENCE  PRICE.  Except  upon a "Series A and
Series B Qualified  Liquidation Event" (as hereinafter  defined) with respect to
the Series A Stock and the Series B Stock and except upon a "Series CC Qualified
Liquidation Event" (as hereinafter  defined) with respect to the Series CC Stock
(and except to the extent that the Board of Directors, pursuant to the authority
granted above and pursuant to the Colorado Business  Corporation Act has created
a series of Preferred  Stock that is senior to the Series A Stock,  the Series B
Stock, or the Series CC Stock in the liquidation,  dissolution, or winding up of
this Corporation), in the event of any liquidation, dissolution or winding up of
this Corporation, whether voluntary or involuntary:

                                    (I) The holders of the outstanding shares of
Series A Stock shall be entitled to be paid out of the assets of the Corporation
available for distribution to its  shareholders,  whether from capital,  surplus
funds or  earnings,  before  payment  is made in respect of the shares of Common
Stock,  Series B Stock or Series CC Stock or any other  equity  security  of the
Corporation  not  expressly  senior to the Series A Stock as to its  liquidation
preference,  in an amount  equal to $10.00 per share  (Appropriately  Adjusted),
together  with an amount equal to the greater of (A) eight  percent (8%) of such
$10.00 compounded annually at the rate of 8% for each year (or fraction thereof)
after the date of the  issuance  of each such share of Series A Stock,  less the
amount,  if any,  of any  cash  dividends  actually  paid to the  Series A Stock
through  the date of  liquidation,  or (B) any  declared  and  unpaid  dividends
thereon ( the "Series A Preference Price");

                                    (II) The holders of the  outstanding  shares
of Series B Stock and the  Series CC Stock  shall be  entitled,  on a pari passu
basis,  to  be  paid  out  of  the  assets  of  the  Corporation  available  for
distribution  to its  shareholders,  whether  from  capital,  surplus  funds  or
earnings,  after payment of the Series A Preference Price and before any payment
is made in respect of the shares of Common Stock or any other equity security of
the Corporation  not expressly  senior to the Series B Stock and Series CC Stock
as to its  liquidation  preference,  (with  respect to the Series B Stock) in an
amount equal to $17.50 per share  (Appropriately  Adjusted),  together  with any
declared and unpaid  dividends  thereon (the "Series B Preference  Price"),  and
(with  respect  to the  Series CC Stock) in an amount  equal to $45.00 per share
(Appropriately Adjusted), together with an amount equal to eight percent (8%) of
such $45.00 at the rate of 8% for each year (or fraction thereof) after the date
of the issuance of each such share of Series CC Stock,  less the amount, if any,
of any cash  dividends  actually paid to the Series CC Stock through the date of
liquidation (but not less than zero) (the "Series CC Preference Price");

                                    (III)   After   payment   of  the  Series  B
Preference  Price to the holders of Series B Stock, and payment of the Series CC
Preference  Price to the holders of Series CC Stock,  the holders of outstanding
shares  of  Series  B Stock  and  Common  Stock  shall  be  paid,  on a pro rata
as-converted basis, from the remaining assets of the Corporation until such time
that the holders of  outstanding  shares of Series B Stock shall have  received,
including  any  payment of the Series B  Preference  Price,  $30.00 per share of
Series B Stock (Appropriately


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Adjusted) ( the "Series B  Liquidation  Amount") and no further  payment will be
made to the holders of the Series CC Stock; and

                                    (IV)  After  payment in full of the Series A
Preference  Price, the Series B Liquidation  Amount and the Series CC Preference
Price as described hereinabove, the remaining assets of the Corporation shall be
distributed ratably solely among the holders of the outstanding shares of Common
Stock in an equal amount per share.

                           (B)  PARTIAL  PAYMENT.  Upon  any  such  liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary:

                                    (I)  If  the   assets  of  the   Corporation
available for distribution to its  shareholders  shall be insufficient to pay in
full the Series A  Preference  Price  required  to be paid to the holders of the
outstanding shares of Series A Stock, then all assets of the Corporation legally
available for distribution to the holders of equity securities, after payment in
full of any liquidation  preference  payable to holders of shares of a series of
Preferred  Stock as may be designated by the Board of Directors after the Filing
Date that is by its terms  senior to the  Series A Stock,  shall be  distributed
ratably among the holders of the  outstanding  shares of Series A Stock (and the
holders of any Preferred  Stock that by its terms is to be treated in pari passu
with the Series A Stock) in  proportion  to the Series A  Preference  Price upon
liquidation that each Series A Stock holder is otherwise entitled to receive;

                                    (II) If, upon  payment in full of the Series
A Preference and any liquidation  preference of any series of Preferred Stock as
may be designated by the Board of Directors after the Filing Date that is by its
terms senior to the Series B Stock and the Series CC Stock, the remaining assets
shall be insufficient to pay the holders of the Series B Stock and the Series CC
Stock their full respective  Preference  Price, then all of the remaining assets
of the Corporation  legally  available for distribution to the holders of equity
securities shall be distributed ratably to the holders of the Series B Stock and
Series CC Stock (and the holders of any Preferred  Stock that by its terms is to
be  treated  in pari  passu  with the Series B Stock and the Series CC Stock) in
proportion to the  respective  amounts which would be payable on the shares held
by them if the  respective  Preference  Price  were paid in full.  Each share of
Series B Stock and each share of Series CC Stock  shall rank on parity with each
other  share  of  Series  B  Stock  and  Series  CC  Stock  without   regard  to
distributions on the liquidation,  dissolution or winding up of the Corporation,
and no amount shall be paid or set apart for payment on the shares of the Series
B Stock or the shares of Series CC Stock unless at the same time amounts in like
proportion to the respective  Preference Prices of the Series CC Stock or Series
B Stock, as the case may be, then outstanding shall be paid or set apart.

                           (C)  CERTAIN  TRANSACTIONS.  The  following  shall be
deemed to be a liquidation, dissolution or winding up within the meaning of this
Section 2 with  respect  to the  Series A Stock,  Series B Stock  and  Series CC
Stock: (A) a sale of all or substantially  all of the  Corporation's  assets; or
(B) a consolidation,  merger or  reorganization  of the Corporation with or into
any other corporation or corporations if the  Corporation's  shareholders do not
control a majority of the outstanding  voting  securities of such  consolidated,
merged or reorganized  corporation(s).  The  Corporation  shall provide  written
notice of each of the above  transactions  to each holder of Preferred  Stock at
least ten (10) days prior to such  transaction  in accordance  with Section 4(n)
(below),  although the failure to provide such notice shall not invalidate  such
transaction.

                           (D) LIQUIDATION  ADJUSTMENT.  The Series A Preference
Price, the Series B Preference  Price,  the Series B Liquidation  Amount and the
Series CC Preference Price shall each be Appropriately Adjusted.

                           (E) FURTHER SERIES.  Notwithstanding  anything in the
foregoing,  the Board of Directors has the  authority  pursuant to the foregoing
and to the Colorado  Business  Corporation  Act to create  additional  series of
Preferred  Stock  that  are (as to the  rights  of  such  series  following  any
liquidation,  dissolution,  or winding up of this Corporation) senior to, junior
to, or in pari passu with any authorized series of Preferred Stock or the Common
Stock,  including  any  series  authorized  hereafter  except to the  extent the
resolutions creating any series authorized hereafter  specifically prohibits the
creation  of any series  senior to or in pari  passu with such  series as to the
rights of such series in the event of any liquidation,  dissolution,  or winding
up of this Corporation.


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<PAGE>

                  3.       VOTING.

                           (A) GENERALLY. Except as otherwise required by law or
expressly  provided  herein,  each  share of Series A Stock,  Series B Stock and
Series CC Stock shall be entitled to vote on all matters  submitted  or required
to be submitted to a vote of the  shareholders  of the  Corporation and shall be
entitled  to the number of votes  equal to the number of whole  shares of Common
Stock into which such shares of Preferred Stock are convertible  pursuant to the
provisions  hereof,  at the record date for the  determination  of  shareholders
entitled to vote on such matters or, if no such record date is  established,  at
the date such vote is taken or any written consent of shareholders is solicited.
In each such case,  except as otherwise  required by law or  expressly  provided
herein,  the  holders of shares of Series A Stock,  Series B Stock and Series CC
Stock and the holders of Common  Stock shall vote  together  and not as separate
classes.

                           (B) SPECIAL VOTING FOR THE ELECTION OF DIRECTORS. The
Board of Directors shall be elected as follows:

                                    (I) So long as at least One Hundred Thousand
(100,000)  shares of Series A Stock are  issued and  outstanding  (Appropriately
Adjusted), the holders of Series A Stock shall be entitled, voting as a separate
class, to elect one (1) and only one (1) member to the 'Board of Directors;

                                    (II)  So  long  as  at  least  Two   Hundred
Thousand  (200,000)  shares  of  Series  B  Stock  are  issued  and  outstanding
(Appropriately  Adjusted),  the  holders  of Series B Stock  shall be  entitled,
voting as a  separate  class,  to elect  one (1) and only one (1)  member to the
Board of Directors;

                                    (III)  So  long  as  at  least  One  Hundred
Thousand  (100,000)  shares  of  Series  CC Stock  are  issued  and  outstanding
(Appropriately  Adjusted),  the  holders of Series CC Stock  shall be  entitled,
voting as a  separate  class,  to elect  one (1) and only one (1)  member to the
'Board of Directors;

                                    (IV) The remaining authorized members of the
Board of Directors  not entitled to be elected by any series of Preferred  Stock
then  outstanding  from time to time shall be  elected by the  holders of Common
Stock.

                           (C) REMOVALS OR RESIGNATIONS.  Any vacancy created on
the Board of  Directors  shall be filled by a  successor  Director  who shall be
elected in a manner by which his or her  predecessor  was  elected  as  provided
above.  Any  Director who has been elected to the Board of Directors as provided
above may be removed  during his term of office in accordance  with the Business
Corporation Act of the State of Colorado,  and any vacancy thereby created shall
be filled as provided in this subparagraph.

                           (D) FURTHER SERIES.  Notwithstanding  anything in the
foregoing,  the Board of Directors has the  authority  pursuant to the foregoing
and to the Colorado  Business  Corporation  Act to create  additional  series of
Preferred  Stock which are (as to the rights of such series to vote)  senior to,
junior to, or in pari passu with any authorized series of Preferred Stock or the
Common Stock, including any series authorized hereafter except to the extent the
resolutions creating any series authorized hereafter  specifically prohibits the
creation  of any series  senior to or in pari  passu with such  series as to the
right to vote.

                  4.       CONVERSION.  The holders of the outstanding shares of
Series A Stock,  Series B Stock and  Series CC Stock  shall  have the  following
conversion rights (the "Conversion Rights"):

                           (A)      RIGHT TO CONVERT.

                                    (I) Each  share of  Series A Stock  shall be
convertible,  at the option of the holder thereof, at any time after the date of
issuance of such shares,  at the office of the Corporation or any transfer agent
for the Corporation's shares into that number of shares of Common Stock which is
equal to the  quotient  obtained by  dividing  $10.00 for each share of Series A
Stock by the Series A Conversion Price (as such term is hereinafter  defined) in
effect  immediately  prior to the time of such conversion.  The initial price at
which shares of Common Stock shall be deliverable  upon  conversion of shares of
Series A Stock shall be $2.00 (as adjusted from time to time


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as herein  provided  from and after the date shares of Series A Stock were first
issued, the "Series A Conversion Price");

                                    (II) Each  share of Series B Stock  shall be
convertible,  at the option of the holder thereof, at any time after the date of
issuance of such shares,  at the office of the Corporation or any transfer agent
for the Corporation's shares into that number of shares of Common Stock which is
equal to the  quotient  obtained by  dividing  $17.50 for each share of Series B
Stock by the Series B Conversion Price (as such term is hereinafter  defined) in
effect  immediately  prior to the time of such conversion.  The initial price at
which shares of Common Stock shall be deliverable  upon  conversion of shares of
Series B Stock shall be $1.75 (as adjusted from time to time as herein  provided
from and after the date that  shares of Series B Stock  were first  issued,  the
"Series B Conversion Price"); and

                                    (III) Each share of Series CC Stock shall be
convertible,  at the option of the holder thereof, at any time after the date of
issuance of such shares,  at the office of the Corporation or any transfer agent
for the Corporation's shares into that number of shares of Common Stock which is
equal to the quotient  obtained by dividing the Series CC Preference  Price then
in effect for each share of Series CC Stock by the  Series CC  Conversion  Price
(as such term is hereinafter defined) in effect immediately prior to the time of
such  conversion.  The initial  price at which  shares of Common  Stock shall be
deliverable  upon  conversion  of shares  of Series CC Stock  shall be $0.75 (as
adjusted  from  time to time as  herein  provided,  the  "Series  CC  Conversion
Price").

                           (B)   MECHANICS   OF   CONVERSION.   Each  holder  of
outstanding  shares  of  Series A Stock,  Series B Stock or  Series CC Stock who
desires to convert the same into  shares of Common  Stock  shall  surrender  the
certificate  or  certificates  therefor,  duly  endorsed,  at the  office of the
Corporation or of any transfer agent for the Corporation's shares and shall give
written  notice to the  Corporation  at such office  that such holder  elects to
convert  the same and shall  state  therein  the  series and number of shares of
Preferred Stock being  converted.  Thereupon,  the  Corporation  shall 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 all declared  but unpaid  dividends on the shares being  converted.
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  or  certificates
representing the 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.

                           (C) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS.  If
the  Corporation  at any time or from time to time  after  the date  that  these
Amended and  Restated  Articles of  Incorporation  were filed with the  Colorado
Secretary of State (the  "Filing  Date")  effects a division of the  outstanding
shares of Common Stock, the Series A Conversion Price, Series B Conversion Price
and Series CC  Conversion  Price  (together,  the  "Preferred  Stock  Conversion
Prices"  or  singly,  each  a  "Preferred  Stock  Conversion  Price")  shall  be
proportionately  decreased and,  conversely,  if the Corporation at any time, or
from time to time,  after the Filing Date  combines  the  outstanding  shares of
Common Stock,  each Preferred Stock  Conversion  Price shall be  proportionately
increased.  Any  adjustment  under this  Section  4(c) shall be effective on the
close of business on the date such division or combination becomes effective.

                           (D)    ADJUSTMENT    FOR   CERTAIN    DIVIDENDS   AND
DISTRIBUTIONS.  If the  Corporation  at any time or from time to time  after the
Filing  Date pays or fixes a record  date for the  determination  of  holders of
shares of Common Stock entitled to receive a dividend or other  distribution  in
the form of shares of Common Stock, or rights or options for the purchase of, or
securities convertible into, Common Stock, then in each such event the Preferred
Stock Conversion  Prices shall be decreased,  as of the time of such payment or,
in the event a record date is fixed,  as of the close of business on such record
date, by multiplying each Preferred Stock Conversion Price by a fraction

                  (A)      the  numerator  of which shall be the total number of
                           shares of Common Stock outstanding  immediately prior
                           to the time of such  payment or the close of business
                           on such record date and


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                  (B)      the  denominator  of  which  shall  be (A) the  total
                           number  of  shares   of  Common   Stock   outstanding
                           immediately  prior to the time of such payment or the
                           close of  business  on such  record date plus (B) the
                           number of shares of Common Stock  issuable in payment
                           of such dividend or  distribution or upon exercise of
                           such option or right of conversion;

provided, however, that if a record date is fixed and such dividend is not fully
paid or such other  distribution  is not fully made on the date fixed  therefor,
the Preferred Stock Conversion  Prices shall not be decreased as of the close of
business on such record date as hereinabove provided as to the portion not fully
paid or distributed and thereafter each Preferred Stock  Conversion  Price shall
be  decreased  pursuant  to this  Section  4 as of the date or  dates of  actual
payment of such dividend or distribution.

                           (E)    ADJUSTMENTS    FOR   OTHER    DIVIDENDS    AND
DISTRIBUTIONS.  If the  Corporation  at any time or from time to time  after the
Filing  Date pays,  or fixes a record date for the  determination  of holders of
shares of Common Stock entitled to receive,  a dividend or other distribution in
the form of securities of the  Corporation  other than shares of Common Stock or
rights or options for the purchase of, or securities  convertible  into,  Common
Stock,  then in each such event  provision  shall be made so that the holders of
outstanding  shares of Series A Stock,  Series B Stock and Series CC Stock shall
receive upon conversion  thereof,  in addition to the number of shares of Common
Stock receivable  thereupon,  the amount of securities of the Corporation  which
they would have  received had their  respective  shares of Preferred  Stock been
converted  into  shares of Common  Stock on the date of such  event and had such
holders thereafter, from the date of such event to and including the actual date
of conversion of their shares,  retained such  securities,  subject to all other
adjustments  called for during such period  under this Section 4 with respect to
the rights of the holders of the outstanding shares of Series A Stock,  Series B
Stock and Series CC Stock.

                           (F)  ADJUSTMENT  FOR  RECLASSIFICATION,  EXCHANGE AND
SUBSTITUTION.  If, at any time or from time to time after the Filing  Date,  the
number of shares of Common  Stock  issuable  upon  conversion  of the  shares of
Series A Stock, Series B Stock and Series CC Stock is changed into the same or a
different  number  of shares of any  other  class or  classes  of stock or other
securities,  whether by  recapitalization,  reclassification or otherwise (other
than a recapitalization,  division or combination of shares or stock dividend or
a reorganization, merger, consolidation or sale of assets provided for elsewhere
in this  Section 4 or in Section 2 of these  Amended  and  Restated  Articles of
Incorporation),  then in any such event  each  holder of  outstanding  shares of
Series  A Stock,  Series  B Stock  or  Series  CC  Stock  shall  have the  right
thereafter  to convert  such  shares of  Preferred  Stock into the same kind and
amount of stock  and other  securities  receivable  upon such  recapitalization,
reclassification  or other  change,  as 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.

                           (G) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES
OF ASSETS. If, at any time or from time to time after
the Filing Date, there is

                  (A)      a capital  reorganization  of the Common Stock (other
                           than  a  recapitalization,   division,   combination,
                           reclassification  or exchange of shares  provided for
                           elsewhere  in this Section 4 or in Section 2 of these
                           Amended and Restated Articles of Incorporation) or

                  (B)      a merger or  consolidation of the Corporation into or
                           with  another   corporation  or  a  sale  of  all  or
                           substantially all of the Corporation's properties and
                           assets to any other person,

then, as a part of such capital reorganization,  merger,  consolidation or sale,
provision  shall be made so that the holders of  outstanding  shares of Series A
Stock,  Series  B Stock  and  Series  CC Stock  shall  thereafter  receive  upon
conversion thereof the number of shares of stock or other securities or property
of the Corporation,  or of the successor  corporation resulting from such merger
or  consolidation  or sale,  to which a holder of the number of shares of Common
Stock into which their shares of  Preferred  Stock were  convertible  would have
been entitled on such capital reorganization, merger, consolidation or sale.


                                       7

<PAGE>

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
outstanding  shares of Series A Stock,  Series B Stock and Series CC Stock after
the capital reorganization,  merger, consolidation,  or sale to the end that the
provisions  of this  Section 4 (including  adjustment  of each  Preferred  Stock
Conversion  Price and the number of shares into which such  shares of  Preferred
Stock may be converted)  shall be  applicable  after that event and be as nearly
equivalent to such Preferred Stock Conversion Prices and number of shares as may
be practicable.

                           (H)      SALE OF SHARES BELOW CONVERSION PRICE.

                                    (i) If,  at any  time  or from  time to time
after the Filing  Date,  the  Corporation  issues or sells,  or is deemed by the
express  provisions  of this  Section  4(h) to have  issued or sold,  Additional
Shares of Common  Stock (as  hereinafter  defined)  for an  Effective  Price (as
hereinafter  defined)  less than any then  current  Preferred  Stock  Conversion
Price,  other than as a dividend or other  distribution on any class of stock as
provided in Section  4(d) above or upon a division or  combination  of shares of
Common Stock as provided in Section 4(c) above,  then,  in any such event,  each
such  Preferred  Stock  Conversion  Price shall be  reduced,  as of the close of
business  on the date of such  issuance  or sale,  to an  amount  determined  by
multiplying the Preferred Stock Conversion Price by a fraction

                  (A)      the  numerator  of which  shall be (x) the  number of
                           shares of Common  Stock  outstanding  at the close of
                           business on the day immediately preceding the date of
                           such issuance or sale,  plus (y) the number of shares
                           of Common  Stock  which the  aggregate  consideration
                           received (or by the express  provisions hereof deemed
                           to have been  received)  by the  Corporation  for the
                           total number of Additional  Shares of Common Stock so
                           issued or sold would purchase at such Preferred Stock
                           Conversion Price, and

                  (B)      the  denominator  of  which  shall be the  number  of
                           shares of Common  Stock  outstanding  at the close of
                           business  on the date of such  issuance or sale after
                           giving  effect to such issuance or sale of Additional
                           Shares of Common Stock.

For the purpose of the calculation described in this Section 4(h), the number of
shares of Common Stock outstanding  shall include,  in addition to the number of
shares of Common  Stock  actually  outstanding,  the  number of shares of Common
Stock into which the then outstanding  shares of Series A Stock,  Series B Stock
and Series CC Stock could be converted if fully converted on the day immediately
preceding the issuance or sale or deemed  issuance or sale of Additional  Shares
of Common  Stock;  and the  number of shares  of  Common  Stock  which  would be
obtained  through  the  exercise  or  conversion  of  all  rights,  options  and
Convertible   Securities  (as  hereinafter   defined)  outstanding  on  the  day
immediately  preceding  the  issuance  or sale  or  deemed  issuance  or sale of
Additional Shares of Common Stock.

                                    (II)  For  the   purpose   of   making   any
adjustment  required under this Section 4(h), the consideration  received by the
Corporation for any issuance or sale of securities shall

                  (A)      to the  extent it  consists  of  property  other than
                           cash,   be  the  fair  value  of  that   property  as
                           reasonably    determined   in   good   faith   by   a
                           disinterested majority of the Board of Directors; and

                  (B)      if  Additional  Shares of Common  Stock,  Convertible
                           Securities  (as  hereinafter  defined)  or  rights or
                           options  to  purchase  either  Additional  Shares  of
                           Common Stock or Convertible  Securities are issued or
                           sold together with other stock or securities or other
                           assets of the Corporation  for a consideration  which
                           covers both, be the portion of the  consideration  so
                           received  reasonably  determined  in good  faith by a
                           disinterested  majority of the Board of  Directors to
                           be  allocable  to such  Additional  Shares  of Common
                           Stock, Convertible Securities or rights or options.

                                    (III)  For  the  purpose  of the  adjustment
required under this Section 4(h), if the Corporation  issues or sells any rights
or options for the purchase of, or stock or other securities  convertible  into,
Additional  Shares of Common Stock (such  convertible  stock or securities being
hereinafter referred to as


                                       8

<PAGE>

"Convertible  Securities")  and if the  Effective  Price (as  defined in Section
4(h)(v) below) of such  Additional  Shares of Common Stock is less than any then
current  Preferred Stock Conversion  Price,  the Corporation  shall be deemed to
have issued, at the time of the issuance of such rights,  options or Convertible
Securities the maximum number of Additional Shares of Common Stock issuable upon
exercise or conversion thereof and to have received as consideration therefor an
amount equal to

                  (A)      the  total  amount  of  the  consideration,  if  any,
                           received by the  Corporation for the issuance of such
                           rights or options or Convertible Securities plus

                  (B)      in the case of such  rights or  options,  the minimum
                           amount  of  consideration,  if  any,  payable  to the
                           Corporation  upon  the  exercise  of such  rights  or
                           options  or, in the case of  Convertible  Securities,
                           the minimum amount of consideration,  if any, payable
                           to the Corporation upon the conversion thereof.

Thereafter, no further adjustment of such Preferred Stock Conversion Price shall
be made as a result of the actual issuance of Additional  Shares of Common Stock
on the  exercise  of any such  rights or options or the  conversion  of any such
Convertible Securities.

         If any such rights or options or the conversion  privilege  represented
by any such Convertible  Securities shall expire or otherwise  terminate without
having  been  exercised,  the subject  Preferred  Stock  Conversion  Price shall
thereafter  be the  Preferred  Stock  Conversion  Price  that would have been in
effect had an adjustment been made on the basis that the only Additional  Shares
of Common Stock so issued were the  Additional  Shares of Common Stock,  if any,
actually  issued or sold on the  exercise of such rights or options or rights of
conversion  of such  Convertible  Securities,  and were  issued  or sold for the
consideration actually received by the Corporation upon such exercise plus

                  (A)      the consideration,  if any, actually received for the
                           granting of all such  rights or  options,  whether or
                           not exercised,

                  (B)      the  consideration,  if  any,  actually  received  by
                           issuing  or  selling   the   Convertible   Securities
                           actually converted; and

                  (C)      the  consideration,  if any, actually received on the
                           conversion of such Convertible Securities.

However, if any such rights or options or Convertible  Securities by their terms
provide,  with  the  passage  of time or  otherwise,  for  any  increase  in the
consideration  payable to the  Corporation,  upon the  exercise,  conversion  or
exchange  thereof,  the  Conversion  Price  for  the  Preferred  Stock,  and any
subsequent  adjustments based thereon,  shall upon any such increase or decrease
becoming effective be recomputed to reflect such increase or decrease insofar as
it affects such rights,  options or the rights of conversion  or exchange  under
such Convertible Securities.

                                    (IV)  For  the  purpose  of  any  adjustment
required under this Section 4(h), if the Corporation  issues or sells any rights
or options for the purchase of Convertible Securities and if the Effective Price
of the Additional Shares of Common Stock underlying such Convertible  Securities
is less than any then current  Preferred Stock  Conversion  Price,  then in each
such  event the  Corporation  shall be deemed to have  issued at the time of the
issuance of such rights or options the maximum  number of  Additional  Shares of
Common  Stock  issuable  upon  conversion  of the total  number  of  Convertible
Securities  covered  by such  rights  or  options  (as set  forth  in the  legal
instruments setting forth the terms of such Convertible  Securities) and to have
received as consideration  for the issuance of such Additional  Shares of Common
Stock an amount equal to the amount of  consideration,  if any, received for the
issuance of such rights or options plus (A) the minimum amount of consideration,
if any,  payable upon the exercise of such rights or options and (B) the minimum
amount of consideration, if any, payable upon the conversion of such Convertible
Securities.

No further  adjustment of such Preferred Stock Conversion Price shall be made as
a result of the actual issuance of the Convertible  Securities upon the exercise
of such rights or options or upon the actual  issuance of  Additional


                                       9

<PAGE>

Shares of Common Stock upon the conversion of such Convertible  Securities.  The
provisions  of Section  D.8.(iii)  for the  adjustment  of the  Preferred  Stock
Conversion  Prices  upon the  expiration  of rights or  options or the rights of
conversion  of  Convertible  Securities  shall apply  mutatis  mutandis upon the
expiration of the rights, options and Convertible Securities referred to in this
Section 4(h)(iv).

                                    (V)  "Additional  Shares  of  Common  Stock"
shall mean all shares of Common  Stock  issued or deemed to be issued under this
Section 4(h) after the Filing Date, other than

                  (A)      shares of Common Stock issued upon  conversion of the
                           shares of Preferred Stock;

                  (B)      shares  of  Common  Stock (or  options,  warrants  or
                           rights  therefor)  granted  or  issued  hereafter  to
                           employees,    officers,    directors,    contractors,
                           consultants  or advisers to, the  Corporation  or any
                           subsidiary  pursuant to incentive  agreements,  stock
                           purchase  or stock  option  plans,  stock  bonuses or
                           awards,  warrants,  contracts  or other  arrangements
                           that are approved by the Board of Directors;

                  (C)      securities issued by the Corporation  representing in
                           the  aggregate  five percent (5%) or less of the then
                           outstanding    shares   of   Common   Stock,   on   a
                           fully-diluted  basis,  to  contractors,  consultants,
                           advisors  to, or vendors  of, the  Corporation  or in
                           connection  with any  credit,  financing  or  leasing
                           agreements  or  similar  instruments  with  equipment
                           lessors or other persons providing equipment lease or
                           other equipment financing;

                  (D)      securities  issued in connection  with or pursuant to
                           the  acquisition  of all or any  portion  of  another
                           company by the  Corporation  whether by merger or any
                           other reorganization or by the purchase of all or any
                           portion of the assets of another company, pursuant to
                           a plan,  agreement or other  arrangement  approved by
                           the Board of Directors;

                  (E)      securities   issued  to  or  in  connection  with  an
                           arrangement  or venture  with a strategic  partner of
                           the   Corporation,    provided   such   issuance   is
                           unanimously approved by the Board of Directors;

                  (F)      shares of Common Stock or  Preferred  Stock issued or
                           issuable upon the exercise of any  warrants,  options
                           or other rights that are outstanding as of the Filing
                           Date (or issued or issuable  after the  reissuance of
                           any such expired or terminated  options,  warrants or
                           rights and net of any such issued shares  repurchased
                           by the Corporation);

                  (G)      the  reissuance or assignment by the  Corporation  of
                           any  shares of  Common  Stock  outstanding  as of the
                           Filing Date to a different  person from the holder of
                           such shares;

                  (H)      securities   issued  pursuant  to  any  anti-dilution
                           rights of the holders of Preferred  Stock or warrants
                           to purchase  securities of the  Corporation  that are
                           outstanding as of the Filing Date;

                  (I)      shares of Common Stock issued in a public offering by
                           the  Corporation  in which all  shares  of  Preferred
                           Stock  are  automatically  converted  into  shares of
                           Common Stock; and

                  (J)      shares of Common  Stock  issued by way of dividend or
                           other  distribution  on  shares of  Preferred  Stock,
                           Common Stock or other  securities  excluded  from the
                           definition  of  Additional  Shares of Common Stock by
                           the  foregoing  clauses (A), (B), (C), (D), (E), (F),
                           (G), (H), (I) and this clause (J).

The  "Effective  Price" of  Additional  Shares of Common  Stock  shall  mean the
quotient  obtained by dividing the total number of  Additional  Shares of Common
Stock issued or sold, or deemed to have been issued or sold,  under this Section
4(h) into the aggregate  consideration received, or deemed to have been received
for such Additional Shares of Common Stock.


                                       10

<PAGE>


                           (I) CERTIFICATE OF ADJUSTMENT. Upon the occurrence of
each adjustment or readjustment of any Preferred  Stock  Conversion  Price,  the
Corporation,  at its sole expense,  shall  promptly  compute such  adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Preferred Stock affected by the adjustment a certificate setting forth
such adjustment or readjustment  and showing in detail the facts upon which such
adjustment or readjustment is based.

                           (J)  NOTICES  OF  RECORD  DATE.  In the  event of 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  any  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 transfer of all or substantially all of the assets of
the  Corporation,  or any voluntary or involuntary  dissolution,  liquidation or
winding up of the  Corporation,  the  Corporation  shall mail to each  holder of
shares of Series A Stock,  Series B Stock  and  Series CC Stock at least  twenty
(20) days prior to the record date specified  therein,  a notice  specifying (i)
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;
(ii) the date on which  any  such  reorganization,  reclassification,  transfer,
consolidation,  merger,  dissolution,  liquidation or winding up, is expected to
become effective and the specific  details thereof;  and (iii) the date, if any,
that is to be fixed as to when the  holders of record of shares 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
reorganization,  reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up.

                           (K)      AUTOMATIC CONVERSION.

                                    (I)  "QUALIFIED   LIQUIDATION  EVENT."  Each
share of Series A Stock,  Series B Stock and Series CC Stock shall automatically
be  converted  into shares of Common Stock based upon its  respective  Preferred
Stock Conversion Price upon

                  (A)      the  closing  of  an  underwritten   public  offering
                           pursuant to an effective registration statement under
                           the Securities Act of 1933, as amended,  covering the
                           offering  and sale of shares of Common  Stock for the
                           account of the Corporation (other than a registration
                           statement  effected  solely to  implement an employee
                           benefit plan, a transaction  in which Rule 145 of the
                           Securities  and Exchange  Commission is applicable or
                           any other form or type of  registration  in which the
                           shares of Common Stock  issuable  upon  conversion of
                           the  shares of  Preferred  Stock  cannot be  included
                           pursuant to the  Securities  and Exchange  Commission
                           rules or practices)  which results in aggregate gross
                           cash  proceeds  to  the   Corporation   of  at  least
                           $15,000,000  at a per share  price  equal to at least
                           $5.00 (Appropriately Adjusted) and an aggregate value
                           of the Corporation  immediately prior to the offering
                           of at least $40,000,000,  in the case of the Series A
                           Stock   and   Series  B   Stock,   and  of  at  least
                           $150,000,000,  in the  case of the  Series  CC  Stock
                           which   aggregate   value  shall  be   determined  by
                           multiplying  (x) the number of outstanding  shares of
                           Common Stock of the Corporation,  on a fully-diluted,
                           as-converted   basis,   immediately   prior   to  the
                           offering,  times (y) the  initial  per share price of
                           the  Corporation's  Common  Stock as  offered  to the
                           public in the offering, or

                  (B)      (x) a merger or consolidation of the Corporation with
                           or into  another  corporation  or entity,  or (y) the
                           sale of all or substantially all of the Corporation's
                           properties and assets, or (z) a sale of the shares of
                           the Corporation's  Common Stock, in each circumstance
                           in which each holder of Preferred Stock  concurrently
                           receives  cash  and/or  marketable  securities  in an
                           aggregate amount equal to at least $5.00 per share of
                           Series  A Stock  and  Series  B Stock  (Appropriately
                           Adjusted)  and  $100.00  per share of Series CC Stock
                           (Appropriately  Adjusted)  if such event occurs on or
                           before March 31, 2002, or $7.00 per share of Series A
                           Stock and Series B Stock (Appropriately Adjusted) and
                           $150.00  per share of Series CC Stock  (Appropriately
                           Adjusted)  if such event occurs after March 31, 2002,
                           and the aggregate gross consideration received by the
                           Corporation  and/or its


                                       11

<PAGE>

                           shareholders  is, with  respect to the Series A Stock
                           and  Series B Stock,  at  least  $40,000,000  (each a
                           "Series A and Series B Qualified Liquidation Event"),
                           or,  with  respect to the  Series CC Stock,  at least
                           $100,000,000 (each a "Series CC Qualified Liquidation
                           Event").

                                    (II)  QUALIFIED  LIQUIDITY  MILESTONE.  Each
share of Series A Stock,  Series B Stock and Series CC Stock shall automatically
be  converted  into  shares of  Common  Stock  based  upon its  Preferred  Stock
Conversion  Price  effective  as of the first  date on which  the  Corporation's
Common  Stock is  qualified  for listing and is trading on the NASDAQ - National
Market  System  ("NMS")  or  the  New  York  Stock  Exchange  ("NSYE")  and  the
Corporation has had, for any three consecutive months (a "Quarter"), (i) average
trading  volume of at least  25,000  shares per trading day, and (ii) an average
daily  high-bid  and low-ask  price,  if the shares are listed and traded on the
NMS, or closing price,  if the shares are listed and traded on the NYSE,  during
such  Quarter  of at least  $5.00 per share  (Appropriately  Adjusted),  if such
Quarter commences on or before April 1, 2002, or $7.00 per share  (Appropriately
Adjusted), if such Quarter commences after April 1, 2002.

                                    (III) UPON VOTE OF 75% OF SERIES A STOCK AND
66-2/3% OF SERIES B STOCK OR SERIES CC STOCK.

                  (A)      Each share of Series A Stock shall  automatically  be
                           converted  into shares of Common Stock based upon the
                           Series A Conversion  Price then  applicable  upon the
                           affirmative   vote  of  the   holders   of  at  least
                           seventy-five  percent (75%) of the outstanding shares
                           of Series A Stock.

                  (B)      Each share of Series B Stock shall  automatically  be
                           converted  into shares of Common Stock based upon the
                           Series B Conversion  Price then  applicable  upon the
                           affirmative vote of at least sixty-six and two thirds
                           percent  (66-2/3%) of the  outstanding  shares of the
                           Series B Stock.

                  (C)      Each share of Series CC Stock shall  automatically be
                           converted  into shares of Common Stock based upon the
                           Series CC Conversion  Price then  applicable upon the
                           affirmative vote of at least sixty-six and two thirds
                           percent  (66-2/3%) of the  outstanding  shares of the
                           Series CC Stock.

Upon the occurrence of an event  specified in this Section 4(k) resulting in the
automatic conversion of the Series A Stock, the Series B Stock and/or the Series
CC Stock, the outstanding shares of each such series of Preferred Stock shall be
converted  into  outstanding  shares  of  Common  Stock,   whether  or  not  the
certificates  representing such shares are surrendered to the Corporation or its
transfer agent. Upon the automatic  conversion of the outstanding shares of each
such series of Preferred Stock, the Corporation  shall notify the holders of the
outstanding  shares of each such series of Preferred  Stock and thereafter  such
holders shall surrender the certificates  representing such shares at the office
of the  Corporation or any transfer agent for the shares.  Thereupon there shall
be issued and delivered to such holder,  promptly at such office and in its name
as shown on such  surrendered  certificate  or  certificates,  a certificate  or
certificates for the number of shares of Common Stock into which the surrendered
shares of Preferred  Stock of such holder were  convertible on the date on which
such automatic conversion occurred.

                           (l) FRACTIONAL SHARES. No fractional shares of Common
Stock shall be issued upon conversion of the shares of Series A Stock,  Series B
Stock or Series CC Stock. In lieu of any fractional share to which the holder of
such shares would otherwise be entitled, the Corporation shall pay cash equal to
the product of (i) such fraction multiplied by (ii) the fair market value of one
share of such series of Preferred Stock on the date of conversion, as determined
in good faith by a disinterested majority of the Board of Directors.


                                       12

<PAGE>


                           (M)  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 Preferred Stock, such number of shares
of  Common  Stock  as  shall  from  time to time be  sufficient  to  effect  the
conversion  of all  outstanding  shares of 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 Preferred Stock, the
Corporation  shall take such 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 purpose.

                           (N) NOTICES. Any notice required by the provisions of
this  Section 4 to be given to a holder of shares of  Preferred  Stock  shall be
deemed  given  upon  actual  receipt or if receipt is refused or does not occur,
then the second  attempted  delivery as  evidenced  by  appropriate  third-party
commercial documentation (i.e., Postal Service, Federal Express, etc.).

                           (O) NO DILUTION OR IMPAIRMENT.  The Corporation shall
not amend its Articles of  Incorporation  or participate in any  reorganization,
transfer  of  assets,  consolidation,  merger,  dissolution,  issue  or  sale of
securities or any other voluntary  action for the purpose of avoiding or seeking
to avoid the  observance  or  performance  of any of the terms to be observed or
performed  hereunder  by the  Corporation,  but will at all times in good  faith
assist  in  carrying  out all such  action  as may be  reasonably  necessary  or
appropriate  in order to  protect  the  rights of the  holders  of the shares of
Preferred Stock against dilution (as contemplated herein) or other impairment of
their rights. This Section 4(o) does not, however, prevent or preclude the Board
of Directors from  designating  any series of Preferred  Stock with  preferences
that are senior to or in pari passu with the Series A Stock, the Series B Stock,
or the Series CC Stock.

                  5. NO  RE-ISSUANCE.  No share  or  shares  of  Series A Stock,
Series B Stock or  Series  CC Stock  acquired  by the  Corporation  by reason of
redemption,  purchase or otherwise shall be reissued,  and all such shares shall
be canceled,  retired and eliminated from the shares that the Corporation  shall
be authorized to issue.

         C.       COMMON STOCK.

                  1. ISSUANCE.  The Common Stock may be issued from time to time
in one or more classes or series in any manner  permitted by law, as  determined
by the Board of Directors and stated in the resolution or resolutions  providing
for issuance  thereof.  Each class or series shall be appropriately  designated,
prior to issuance of any shares thereof, by some distinguishing  letter,  number
or title.  All shares of each class or series of Common  Stock shall be alike in
every particular and shall be of equal rank and have the same power, preferences
and rights,  and shall be subject to the same  qualifications,  limitations  and
voting restrictions, if any.

                  2. VOTING POWERS. The Common Stock may have such voting powers
(full, limited, contingent or no voting powers), such designations,  preferences
and relative, participating, optional or other special rights, and be subject to
such  qualifications,  limitations and  restrictions,  as the Board of Directors
shall determine by resolution or resolutions.  Unless otherwise  resolved by the
Board of Directors at the time of issuing Common Shares,

                  (i) each  Common  Stock  share  shall  be of the  same  class,
                  without   any    designation,    preference    or    relative,
                  participating,  optional or other special rights,  and subject
                  to no qualification, limitation or restriction, and

                  (ii) other than as described  elsewhere herein,  Common Shares
                  shall have unlimited voting rights,  including but not limited
                  to the  right to vote in  elections  for  directors,  and each
                  holder of record of Common Shares  entitled to vote shall have
                  one vote for each share of stock  standing  in his name on the
                  books of the Corporation and entitled to vote.

Cumulative voting shall not be allowed in the election of directors or as to any
other matter presented for shareholder approval.

                  3.  DIVIDENDS.   After  the   requirements   with  respect  to
preferential  dividends,  if any, on Preferred  Stock, and after the Corporation
shall have complied with all  requirements,  if any, with respect to the setting


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<PAGE>

aside of sums in a sinking fund for the purchase or  redemption of shares of any
class or series of  Preferred  Stock,  then and not  otherwise,  the  holders of
Common Stock shall  receive,  to the extent  permitted by law, such dividends as
may be declared from time to time by the Board of Directors.

                  4. DISSOLUTION OR LIQUIDATION.  After  distribution in full of
the preferential  amount,  if any, to be distributed to the holders of Preferred
Stock,  in the event of the voluntary or involuntary  liquidation,  dissolution,
distribution of assets or winding-up of the  Corporation,  the holders of Common
Stock shall be entitled to receive all the remaining  assets of the  Corporation
of  whatever  kind  available  for  distribution  to  shareholders   ratably  in
proportion to the number of shares of Common Stock respectively held by them.

                  5. CONVERTIBILITY.  Common Shares or other shares of any class
or series may be made  convertible  or  exchangeable  for,  at the option of the
Corporation or the holder or upon the occurrence of a specified event, shares or
any other class or classes or any other series of the same or any other class or
classes of shares of the Corporation, at such price or prices or at such rate or
rates  of  exchange  and with  such  adjustments  as  shall be set  forth in the
resolution  or  resolutions  providing for the issuance of such  convertible  or
exchangeable shares adopted by the Board of Directors.

                  6. REDEEMABILITY.  Common Shares may be made redeemable at the
option of the Corporation, of the holder thereof, of another person, or upon the
occurrence  of a  designated  event,  if and to the extent  now or  subsequently
allowed by the Colorado  Business  Corporation Act, as such law may subsequently
be amended,  and the terms and conditions of  redemption,  including the date or
dates upon or after which they shall be redeemable, the amount per share payable
in case of redemption and any variance in the amount or amounts  payable,  among
other terms,  conditions and limitations which may be imposed,  may be fixed and
established  by  the  Board  of  Directors  in  the  resolution  or  resolutions
authorizing the issuance of redeemable Common Shares.

         D.       STATUS OF CERTAIN SHARES.  Shares of Preferred Stock or Common
Stock or other shares that have been redeemed, converted,  exchanged, purchased,
retired or surrendered to the Corporation,  or which have been reacquired in any
other matter, shall have the status of authorized and unissued shares and may be
reissued by the Board of  Directors  as shares of the same or any other  series,
unless  otherwise   provided  herein  or  in  the  resolution   authorizing  and
establishing the shares.

         E.       DENIAL OF  PREEMPTIVE  RIGHTS.  No holder of any shares of the
Corporation  shall be entitled as a matter of right to subscribe for or purchase
any part of any new or  additional  issue of stock of any class or of securities
convertible  into  or  exchangeable  for  stock  of any  class,  whether  now or
hereafter authorized or whether issued for money, for a consideration other than
money, or by way of dividend.

         F.       VOTING MATTERS.

                  1.       DEFINITIONS.  Whenever the term "total  voting power"
appears  in this  Section  F of  Article  THIRD and  except as may be  otherwise
limited in Section B.3 of this  ARTICLE  THIRD,  it shall mean all shares of the
Corporation  entitled  to vote  at a  meeting  or on a  question  presented  for
shareholder approval, and of every class or series of shares entitled to vote by
class or series.  Whenever  the term "votes  cast"  appears in this Section F of
Article  THIRD and except as may be  otherwise  limited  in Section  B.3 of this
ARTICLE THIRD,  it shall mean the total number of voting shares out of the total
voting  power which were  unequivocally  voted in favor of or against a director
standing for election or a matter presented for shareholder  approval at a legal
meeting which commenced with a quorum.  Where votes are to be cast by a class or
series, the term "votes cast" shall mean the total votes cast of each such class
or series.

                  2.       MEETINGS. Meetings of shareholders may be held within
or without the State of Colorado,  as the Bylaws may  provide.  The books of the
Corporation may be kept (subject to any statutory  provision)  outside the State
of  Colorado at such place or places as may be  designated  from time to time by
the Board of Directors in the Bylaws of the Corporation.

                  3.       QUORUM.  Forty  percent  (40%)  of the  total  voting
power,  or where a  separate  vote by class or  series is  required,  40% of the
voting shares of each such class or series,  represented  in person or by proxy,
shall constitute a quorum at any meeting of the Corporation's shareholders.


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<PAGE>

                  4.       VOTE  REQUIRED.  Any  election of  directors  and any
other action to be taken by the Corporation's  shareholders shall require only a
majority of the votes cast,  except where these Amended and Restated Articles or
the Corporation's  Bylaws then in effect (including  Section B.3 of this ARTICLE
THIRD)  requires a higher  proportion of the votes cast or requires a proportion
of the total voting  power.  Abstentions  from voting shall not be considered in
the tallying of votes. Nothing contained in this Section F of this Article THIRD
shall  affect  the  voting  rights of  holders  of any class or series of shares
entitled  to vote as a class or by series.  The Bylaws may  provide for the vote
necessary at any adjournment of a duly called meeting for which a quorum was not
obtained.

                  5.       ACTION   WITHOUT   MEETING.   Any   action   by   the
shareholders may be taken by written  consent,  in lieu of a meeting and without
prior notice or vote,  by the holders of the total voting  power.  The manner of
obtaining  any such  written  consent  shall be  governed  by the  Corporation's
Bylaws.

                  6.       SHAREHOLDER RATIFICATION.  Any contract,  transaction
or act of the  Corporation  or of the  Directors  which  shall  be  ratified  by
appropriate  vote of the shareholders  present at any annual meeting,  or at any
special meeting called for such purpose,  shall so far as is permitted by law be
as valid and binding as though ratified by every shareholder of the Corporation.

FOURTH: In furtherance and not in limitation of the powers conferred by statute,
subject  to any  restrictions  set forth  herein  and in the  Colorado  Business
Corporation  Act,  the  Board  of  Directors  of the  Corporation  is  expressly
authorized to make, alter or repeal Bylaws of the Corporation.

FIFTH: Elections of directors need not be by written ballot unless a shareholder
demands  election by written  ballot at the meeting and before  voting begins or
unless otherwise provided in the Bylaws of the Corporation.

SIXTH:  A.  LIABILITY OF DIRECTORS.  As  authorized by Section  7-108-402 of the
Colorado  Business  Corporation  Act, no director  of the  Corporation  shall be
personally  liable to the  Corporation or any  shareholder  thereof for monetary
damages for breach of his fiduciary duty as a director; except for liability (i)
for any breach of the  director's  duty of loyalty to the  Corporation or to its
shareholders;  (ii)  for acts or  omissions  not in good  faith or that  involve
intentional  misconduct  or a  knowing  violation  of  law;  (iii)  for  acts in
violation of Section 7-108-403 of the Colorado  Business  Corporation Act; as it
now exists or may hereafter be amended,  or (iv) for any transaction  from which
the director directly or indirectly derived any improper personal benefit.  This
Section A of this  Article  SIXTH shall apply to a person who has ceased to be a
director of the  Corporation  with respect to any breach of fiduciary  duty that
occurred  when such  person was serving as a  director.  This  Section A of this
Article  SIXTH  shall  not be  construed  to  limit  or  modify  in any  way any
director's  right to  indemnification  or other  right  whatsoever  under  these
Articles, the Corporation's Bylaws or the Colorado Business Corporation Act.

         If the  Colorado  Business  Corporation  Act is  hereafter  amended  to
authorize the further  elimination  or limitation of the liability of directors,
then,  the  liability  of  the  Corporation's  directors,  in  addition  to  the
limitation  of  personal  liability  provided  herein,  shall be  limited to the
fullest extent permitted by the Colorado Business Corporation Act as so amended.
Any  repeal  or  modification  of this  Section A of this  Article  SIXTH by the
shareholders  shall be  prospective  only and shall  not  adversely  affect  any
limitation  on the personal  liability  of any director  existing at the time of
such repeal or modification.  The affirmative vote of at least a majority of the
total voting power shall be required to amend or repeal,  or adopt any provision
inconsistent with, this Section A of this Article SIXTH.

         B.  INDEMNIFICATION.  The Corporation  shall indemnify,  to the fullest
extent permitted by applicable law in effect from time to time, any person,  and
the estate and personal representative of any such person, against all liability
and expense (including attorney's fees) incurred by reason of the fact that such
person is or was a director or officer of the Corporation, or while serving as a
director or officer of the Corporation,  is or was serving at the request of the
Corporation as a director,  officer, partner, trustee,  employee,  fiduciary, or
agent of,  on in any  similar  managerial  or  fiduciary  position  of,  another
domestic or foreign  corporation or other individual or entity or of an employee
benefit plan. The Corporation shall also indemnify any employee,  fiduciary,  or
agent, and that person's estate and personal  representative,  to the extent and
in the  manner  provided  by  any  bylaw,  resolution  of  the  shareholders  or
directors,  contract  or  otherwise,  so  long  as  such  provision  is  legally
permissible.  The foregoing right of  indemnification  shall not be exclusive of
other rights to which such person may be entitled under applicable law.


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<PAGE>

         C.       INCONSISTENCY.  Neither  any  amendment  nor  repeal  of  this
Article SIXTH, nor the adoption of any provision of the  Corporation's  Articles
of Incorporation inconsistent with this Article SIXTH, shall eliminate or reduce
the effect of this  Article  SIXTH in respect  of any matter  occurring,  or any
action or proceeding  accruing or arising or that,  but for this Article  SIXTH,
would  accrue or  arise,  prior to such  amendment,  repeal  or  adoption  of an
inconsistent provision.

                                  *    *    *

         The foregoing  Amended and Restated  Articles of Incorporation has been
duly  adopted  by the  Corporation's  Board of  Directors  and  shareholders  in
accordance  with  the  applicable  provisions  of  Section  7-110-107(2)  of the
Business Corporation Act of the State of Colorado.

         Executed at Oakland, California on July 20, 2001



                                              /s/ Jim Stein
                                              -------------
                                              Jim Stein, Chief Executive Officer


                                              /s/ James Barnes
                                              ----------------
                                              James Barnes, Treasurer


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