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Exhibit No. 3
Headway Corporate Resources, Inc.
Form 10-KSB
File No. 0-23170

                HEADWAY CORPORATE RESOURCES, INC.
                                
    CERTIFICATE OF DESIGNATION OF NUMBER, POWERS, PREFERENCES
     AND RELATIVE, PATICIPATING, OPTIONAL, AND OTHER SPECIAL
    RIGHTS, AND THE QUALIFICATIONS LIMITATIONS, RESTRICTIONS,
           AND OTHER DISTINGUICHING CHARACTERISTICS OF
                                
              SERIES A CONVERTIBLE PREFERRED STOCK
              SERIES B CONVERTIBLE PREFERRED STOCK
              SERIES C CONVERTIBLE PREFERRED STOCK
              SERIES D CONVERTIBLE PREFERRED STOCK
              SERIES E CONVERTIBLE PREFERRED STOCK
                                
     Pursuant to Section 151(g) of the General Corporation Law of
the State of Delaware

      HEADWAY  CORPORATE RESOURCES, INC., a corporation organized
and  existing  under  the  laws of the  state  of  Delaware  (the
"Corporation"), in accordance with Section 151(g) of the  General
Corporation Law of Delaware, DOES HEREBY CERTIFY:

      1.    The  Certificate of Incorporation of the  Corporation
(the  "Certificate of Incorporation"), fixes the total number  of
shares  of  all  classes of capital stock which  the  Corporation
shall   have  the  authority  to  issue  at  Twenty-Five  Million
(25,000,000)  shares,  of which Five Million  (5,000,000)  shares
shall  be  shares of Preferred Stock, par value $.0001 per  share
(herein  referred  to as "Preferred Stock"), and  Twenty  Million
(20,000,000)  shares shall be shares of Common Stock,  par  value
$.0001 per share (herein referred to as "Common Stock").

      2.    The Certificate of Incorporation expressly grants  to
the  Board  of Directors of the Corporation authority to  provide
for  the  issuance of said Preferred Stock in one or more series,
with  such  voting  powers, if any, and with  such  designations,
preferences  and  relative,  participating,  optional  or   other
special  rights, and qualifications, limitations or  restrictions
thereof,  as  shall be stated and expressed in the resolution  or
revolutions providing for the issue thereof adopted by the  Board
of  Directors  and  as  are  not  stated  and  expressed  in  the
Certificate of Incorporation.

      3.    Pursuant  to authority conferred upon  the  Board  of
Directors  by  the  Certificate of Incorporation,  the  Board  of
Directors,  on  October 18, 1996, by unanimous  written  consent,
duly  authorized and adopted the following resolutions  providing
for issue of the following series of its Preferred Stock

      a  series  to be designated "Series A Convertible Preferred
Stock";
      a  series  to be designated "Series B Convertible Preferred
Stock";
      a  series  to be designated "Series C Convertible Preferred
Stock";
      a  series  to be designated "Series D Convertible Preferred
Stock"; and
      a  series  to be designated "Series E Convertible Preferred
Stock".

      "RESOLVED,  that  issue of five series of Preferred  Stock,
$.0001  par  value  per share, of the Corporation  consisting  of
Twenty-Eight  Hundred  (2,800) shares  designated  as  "Series  A
Preferred Stock", Sixty-Eight Hundred Fifty-Eight (6,858)  shares
designated as "Series B Preferred Stock", Twenty-Four (24) shares
designated as "Series C Preferred Stock", Forty-Four (44)  shares
designated  as  "Series  D  Preferred Stock",  and  Five  Hundred
Seventy-Five  Thousand (575,000) shares designated as  "Series  E
Preferred  Stock", is hereby provided for, and the voting  power,
designation, preferences and relative, participating, optional or
other  special  rights,  and the qualifications,  limitations  or
restrictions thereof, of such series shall be as set forth below,
and  upon the effective date each of said series' shall be deemed
to   be  included  in  and  be  a  part  of  the  Certificate  of
Incorporation pursuant to the provisions of Sections 104 and  151
of the General Corporation Law of the State of Delaware:

              SECTION I.  SERIES A PREFERRED STOCK

      Designation;  Number of Shares.  The  designation  of  such
series   of  Preferred  Stock  shall  be  "Series  A  Convertible
Preferred  Stock"  (hereinafter referred  to  as  the  "Series  A
Stock")  and  the  number of authorized shares  constituting  the
Convertible  Preferred  Stock  is  Two  Thousand  Eight   Hundred
(2,800).  The Series A Stock shall be deemed a separate class  of
Preferred Stock apart from any other series of Preferred Stock.

Part 1.  Dividends.

      1A.   Entitlement.  The holders of Series A Stock shall  be
entitled  to  receive  cumulative  cash  dividends  when  and  as
declared  by  the Corporation's Board of Directors out  of  funds
available therefor under applicable law.  Such dividends shall be
paid  to  the holders of record at the close of business  on  the
date  specified  by  the  Board of Directors  at  the  time  such
dividend is declared; provided, however, that such date shall not
be more than sixty (60) days nor less than ten (10) days prior to
each  respective  Dividend Payment Date (as defined  below  under
this Section I).

      1B.   Accrual Rate.  Dividends on each share  of  Series  A
Stock  shall accrue cumulatively on a daily basis at the rate  of
8.00%  per annum of the Liquidation Value (as defined below under
this  Section I) thereof, but not including such portion  of  the
Liquidation Value, if any, which constitutes accrued  and  unpaid
dividends, from and including the date of issuance of such  share
to  and  including  the  date on which the Redemption  Price  (as
defined below under this Section I) of such share is paid or  the
date  on  which such share in converted into Common Stock.   Such
dividends shall accrue whether or not they have been declared and
whether or not there are profits, surplus or other funds  of  the
Corporation legally available for the payment of dividends.   The
date  on which the Corporation initially issues any share of  the
Series  A  Stock  will  be deemed to be its  "date  of  issuance"
regardless of the number of times transfer of any such  share  is
made  on  the  stock records maintained by or for the Corporation
and  regardless of the number of certificates which may be issued
to evidence any such share.

      1C.   Dividend Payment Dates.  Dividends on  the  Series  A
Stock  shall be payable semi-annually on June 30 and December  31
of each year (the "Dividend Payment Dates").  All dividends which
have  accrued on each share of Series A Stock outstanding  during
the  six-month period ending upon each such Dividend Payment Date
will  be  added to the Liquidation Value of such share  and  will
remain a part thereof until such dividends are paid.

      1D.   Certain  Restrictions.  The  Corporation  shall  not,
without the prior written consent of the holders of a majority of
Series  A  Stock,  (i) declare, order or pay any dividend  (other
than  dividends payable solely in shares of stock) on any  Junior
Securities (as defined below under this Section I) or (ii) redeem
any shares of Junior Securities, unless and until the Corporation
shall  have  redeemed all of the outstanding Series  A  Stock  in
accordance with Part 3 of Section I, below.

      1E.   Distribution of Partial Dividend Payments; Fractional
Shares.  If at any time the Corporation pays less than the  total
amount  of  dividends then accrued with respect to the  Series  A
Stock, such payment will be distributed ratably among the holders
of  such  Series  A  Stock based upon the aggregate  accrued  but
unpaid  dividends  on such Series A Stock held  by  each  holder.
Each  fractional  share of Series A Stock  outstanding,  if  any,
shall  be  entitled  to  a ratably proportionate  amount  of  all
dividends to which each outstanding full share of such  Series  A
Stock is entitled hereunder.

Part 2.  Liquidation.

      Upon  any  liquidation, dissolution or winding  up  of  the
Corporation, the holders of Series A Stock will be entitled to be
paid,  before any distribution or payment is made upon any Junior
Securities,  an amount in cash equal to the aggregate Liquidation
Value  of  all  shares  of Series A Stock  outstanding,  and  the
holders  of  Series A Stock will not be entitled to  any  further
payment.  If upon any such liquidation, dissolution or winding up
of  the  Corporation, the Corporation's assets to be  distributed
among  the  holders of Series A Stock are insufficient to  permit
payment  to such holders of the aggregate amount which  they  are
entitled  to  be  paid, then the entire assets to be  distributed
will  be  distributed ratably among such holders based  upon  the
aggregate  Liquidation Value of the Series A Stock held  by  each
such  holder.  The Corporation will mail written notice  of  such
liquidation,  dissolution or winding up not  less  than  30  days
prior  to the payment date stated therein, to each record  holder
of  Series A Stock.  Neither the consolidation or merger  of  the
Corporation  into or with any other corporation or  corporations,
nor the sale or transfer by the Corporation of all or any part of
its  assets,  nor  the  reduction of the  capital  stock  of  the
Corporation,  will be deemed to be a liquidation, dissolution  or
winding  up of the Corporation within the meaning of  Part  2  of
this Section I.

Part 3.  Redemptions.

      3A.   For  each  share of Series A Stock  which  is  to  be
redeemed,  the  Corporation will be obligated on  the  Redemption
Date  (as  defined  below)  to pay to the  holder  thereof  (upon
surrender by such holder at the Corporation's principal office or
to   the  corporation's  transfer  agent  of  the  certificate(s)
representing  such  shares  of  Series  A  Stock)  an  amount  in
immediately  available  funds  equal  to  the  Liquidation  Value
thereof.   If the funds of the Corporation legally available  for
redemption  of  Series  A  Stock  on  any  Redemption  Date   are
insufficient  to redeem the total number of shares  of  Series  A
Stock  to be redeemed on such date, those funds which are legally
available  will be used to redeem the maximum possible number  of
shares  of Series A Stock ratably among the holders of the Series
A  Stock to be redeemed based upon the Liquidation Value of  such
Series  A Stock held by each such holder.  At any time thereafter
when  additional  funds of the Corporation are legally  available
for the redemption of Series A Stock, such funds will immediately
be  used  to redeem the balance of the Series A Stock  which  the
Corporation has become obligated to redeem on any Redemption Date
but which it has not redeemed.

      3B.   Notice  of  Redemption.  The  Corporation  will  mail
written  notice  of each redemption of Series  A  Stock  to  each
record holder of Series A Stock not more than sixty (60) nor less
then  twenty (20) days prior to the date on which such redemption
in  to be made.  In case fewer than the total number of shares of
Series A Stock represented by any certificate are redeemed, a new
certificate  representing  the number  of  unredeemed  shares  of
Series A Stock will be issued to the holder thereof without  cost
to  such holder within ten business days after surrender  of  the
certificate representing the redeemed Series A Stock.

      3C.  Redemption Date.  On the date on which the Liquidation
value  of  any Series A Stock is paid all rights, including,  but
not  limited  to any right of conversion, of the holder  of  such
Series  A Stock will cease, and such Series A Stock will  not  be
deemed to be outstanding.

      3D.  Redeemed or Otherwise Acquired Shares.  Any shares  of
Series  A Stock which are redeemed or otherwise acquired  by  the
Corporation  shall be canceled, may not be reissued as  Series  A
Stock,  and  shall  be returned to the status of  authorized  and
unissued  shares  of Preferred Stock without  designation  as  to
series.

      3E.   Optional Redemption.  The Corporation may at any time
redeem  all or any portion of the Series A Stock at a  price  per
share  equal  to  the  Liquidation Value thereof,  including  any
accrued and unpaid dividends.

      3F.   Redemptions upon Certain Voluntary Corporate Actions.
Upon  the  occurrence  of a Fundamental Change,  the  Corporation
shall redeem all of the outstanding Series A Stock at a price per
share  equal  to  the  Liquidation Value  thereof  including  any
accrued  and unpaid dividends to the Redemption Date.   The  term
"Fundamental  Change"  means (a) a sale or  transfer  of  all  or
substantially  all  of  the  assets  of  the  Corporation  on   a
consolidated  basis  in  any transaction  or  series  of  related
transactions  (other  than  sales  in  the  ordinary  course   of
business)  and  (b)  any  merger or consolidation  to  which  the
Corporation  is  a  party,  except for  a  merger  in  which  the
Corporation is the surviving corporation and, after giving effect
to  such  merger,  the  holders of the Corporation's  outstanding
capital  stock  (on a fully-diluted basis) immediately  prior  to
such  merger will own the Corporation's outstanding capital stock
(on  a  fully-diluted basis) having a majority  of  the  ordinary
voting power to elect the Corporation's board of directors.

Part 4.  Events of Noncompliance

      4A.   Definition.  An Event of Noncompliance will be deemed
to have occurred if:

      (i)   the Corporation fails to make any redemption  payment
with  respect to the Series A Stock which it is obligated to make
hereunder, whether or not such payment in legally permissible;

      (ii)  the Corporation fails to pay dividends to the holders
of Series A Stock for two (2) consecutive Dividend Payment Dates;

      (iii)   the Corporation makes an assignment for the benefit
of  creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree  is
entered  adjudicating the Corporation bankrupt or  insolvent;  or
any  order for relief with respect to the Corporation is  entered
under  the  Federal Bankruptcy Code; or the Corporation petitions
or  applies  to any tribunal for the appointment of a  custodian,
trustee,  receiver  or liquidator of the Corporation  or  of  any
substantial  part of the assets of the Corporation, or  commences
any proceeding relating to the, Corporation under any bankruptcy,
reorganization,  arrangement, insolvency, readjustment  of  debt,
dissolution  or liquidation law of any jurisdiction or  any  such
petition  or  application is filed, or  any  such  proceeding  is
commenced, against the Corporation and either (a) the Corporation
by  any  act  indicates its approval thereof, consent thereto  or
acquiescence  therein  or  (b)  such  petition,  application   or
proceeding is not dismissed within sixty (60) days.

     4B.  Consequences of Certain Events of Noncompliance.

     (i)  If an Event of Noncompliance has occurred and continued
for  a period of 30 days, the holder or holders of a majority  of
the Series A Stock then outstanding may demand (by written notice
delivered to the Corporation) (a) immediate acceleration  of  the
right  to convert the Series A Stock into shares of Common  Stock
under  Part  6B of this Section I, below, such that 100%  of  the
Series  A  Stock  shall be vested in such holder or  holders  and
eligible  for  conversion into Common Stock on the date  of  such
written  notice,  which notice may include a  written  notice  of
conversion of all or a portion of such shares pursuant to Part 6A
of this Section I, below.

      (ii)   If  an  Event  of  Noncompliance  has  occurred  and
continued  for a period of 30 days, the holder or  holders  of  a
majority  of  the Series A Stock then outstanding (the  "Holder")
may  also  demand that the Board of Directors be deemed dissolved
and  all  positions vacated.  In this connection, the Holder  may
schedule a meeting of all stockholders of the Corporation upon at
least  twenty-four (24) hours advance notice either  in  writing,
telegram or by a telephonic communication to all stockholders  at
which  meeting  a  new  Board  of  Directors  shall  be  elected.
Notwithstanding anything to the contrary in the herein or in  the
Corporation's  By-laws, it is expressly agreed  that  the  Holder
acting  in person or by proxy may elect a majority of the members
of the Board of Directors.  The remaining members of the Board of
Directors  may be elected or designated by holders of a  majority
of the Common Stock.  Upon such election, the Board of Directors,
by  majority  vote, may conduct the business and affairs  of  the
Corporation and may also terminate the employment of any employee
of  the  Corporation  or his or her official  position  with  the
Corporation,   or  both,  subject  to  any  existing   employment
agreements.   The  Holders' directors shall  serve  as  directors
until  such time as the Event of Noncompliance has been  remedied
or  the  Series  A  Stock converted entirely to Common  Stock  or
redeemed in full, at which time such directors shall resign.

      (iii)   If  any Event of Noncompliance exists, each  Holder
will  also have any other rights which such holder may have  been
afforded  under  any contract or agreement at any  time  and  any
other  rights  which such Holder may have pursuant to  applicable
law.

Part  5.   Voting  Rights.  The voting powers of the  holders  of
Series A Stock include:

      (i)   the right, as a class, to elect two (2) directors  to
the Corporation's Board of Directors; and

      (ii)   the  exclusive  right, as a class,  to  approve  any
enlargement of the Corporation's Board of Directors in excess  of
nine (9) directors.

      Except  an  otherwise  provided  herein  and  as  otherwise
provided  by  law, the Series A Stock will have no  other  voting
rights.

Part 6.  Conversion Rights.

      6A.   Conversion Procedure.  Subject to the provisions  set
forth below, each share of Series A Stock shall be convertible at
the  option of the holder thereof, in the manner hereinafter  set
forth, into that number of fully paid and nonassessable shares of
Common Stock determined as set forth below.

     Any holder of Series A Stock desiring to convert such shares
into  shares  of Common Stock shall surrender the certificate  or
certificates  for  the shares being converted, duly  endorsed  or
assigned to the Corporation or in blank, at the principal  office
of the Corporation or at a bank or trust company appointed by the
Corporation for that purpose, accompanied by a written notice  of
conversion specifying the number of shares of Series A  Stock  to
be  converted  and the name or names in which such holder  wishes
the certificate or certificates for shares of Common Stock to  be
issued;  in case such notice shall specify a name or names  other
than  that  of  such holder, such notice shall be accompanied  by
payment of all transfer taxes payable upon the issue of shares of
Common Stock in such name or names.  After receipt of such notice
of conversion, the Corporation shall either:

      (i)   within sixty (60) days after receipt of such  notice,
issue  and  deliver or cause to be issued and delivered  to  such
holder  a certificate or certificates for shares of Common  Stock
resulting from such conversion; or

      (ii)   within sixty (60) days after receipt of such notice,
redeem all or any portion of the Series A Stock specified in  the
aforementioned notice at an amount in immediately available funds
equal to the Liquidation Value thereof, including any accrued and
unpaid dividends.

In case less than all of the shares of Series A Stock represented
by  a  certificate  are to be converted by a  holder,  upon  such
conversion  the  Corporation shall also deliver or  cause  to  be
delivered  to such holder a certificate or certificates  for  the
shares of Series A Stock not so converted.

      6B.   Basic  Conversion Rights.  The right to  convert  the
Series A Stock into shares of Common Stock shall vest immediately
on  issuance  with respect to 26.27% of the shares  of  Series  A
Stock  issued to each holder, and shall vest with respect to  the
remaining shares of Series A Stock of all holders outstanding  on
August  31,  1997.  If shares of Cumulative Preferred  Stock  are
held  by more than one holder, each such holder shall be entitled
to  convert only the applicable percentage of such shares held by
such  holder.   Each share of Series A Stock is convertible  into
476 newly issued shares of Common Stock of the Corporation.

      6C.   Fundamental  Changes.  In case the Corporation  shall
effect  any capital reorganization of the Common Stock  or  shall
consolidate,  merge or engage in a statutory share exchange  with
or into any other corporation (other than a consolidation, merger
or  share  exchange  in which the Corporation  is  the  surviving
corporation   and   each  share  of  Common   Stock   outstanding
immediately  prior to such consolidation or merger is  to  remain
outstanding  immediately after such consolidation or  merger)  or
shall sell or transfer all or substantially all its assets to any
other  corporation, lawful provision shall be made as a  part  of
the  terms  of such transaction whereby the holders of shares  of
the Series A Stock shall receive upon conversion thereof, in lieu
of each share of Common Stock which would have been issuable upon
conversion  of such stock if converted immediately prior  to  the
consummation  of such transaction, the same kind  and  amount  of
stock  (or other securities, cash or property, if any) as may  be
issuable  or  distributable in connection with  such  transaction
with  respect  to each share of Common Stock outstanding  at  the
effective time of such transaction.

      6D.   Conversion Date.  Conversion shall be deemed to  have
been  made  as of the date of surrender of certificates  for  the
shares  of  Series  A Stock to be converted, and  the  giving  of
written notice, as prescribed in Part 6A of this Section I, or as
otherwise prescribed by Part 4B(i) of Section I, above,  and  the
person  entitled to receive the Common Stock issuable  upon  such
conversion shall be treated for all purposes as the record holder
of  such Common Stock on such date.  The Corporation shall not be
required  to deliver certificates for shares of its Common  Stock
while the stock transfer books for such stock or for the Series A
Stock  are  duly  closed for any purpose,  but  certificates  for
shares  of Common Stock shall be issued and delivered as soon  as
practicable after the opening of such books.

      6E.  Converted Shares and Common Stock Held for Conversion.
Any  shares  of  Series  A Stock which  at  any  time  have  been
converted  shall  be canceled, may not be reissued  as  Series  A
Stock,  and  shall  be returned to the status of  authorized  and
unissued  shares  of Preferred Stock without  designation  as  to
series.   The  Corporation shall at all times  reserve  and  keep
available  out  of its authorized but unissued shares  of  Common
Stock,  for the purpose of issuance upon conversion of shares  of
Series  A  Stock, the full number of shares of Common Stock  then
issuable or which may become issuable upon the conversion of  all
shares  of  Series A Stock then outstanding and  shall  take  all
action necessary so that shares of Common Stock so issued will be
validly issued, fully paid and nonassessable.

      6F.  Taxes.  The Corporation will pay any and all stamp  or
similar  taxes that may be payable in respect of the issuance  or
delivery  of  shares of Common Stock on conversion of  shares  of
Series  A Stock.  The Corporation shall not, however, be required
to  pay  any tax which may be payable in respect of any  transfer
involved  in the issuance and delivery of shares of Common  Stock
in  a  name other than that in which the shares of Series A Stock
so  converted were registered, and no such issuance  or  delivery
shall  be  made  unless  and  until the  person  requesting  such
issuance  has paid to the Corporation the amount of any such  tax
or  has  established to the satisfaction of the Corporation  that
such tax has been paid.

Part 7.  Definitions Applicable to Section I.

      "Business  Day"  shall mean a day other  than  a  Saturday,
Sunday  or  other day on which commercial banks in New York,  New
York are authorized or required by law to close.

     "Common Stock" means the Common Stock, $0.0001 par value per
share,  of the Corporation and any capital stock of any class  of
the  Corporation hereafter authorized which is not limited  to  a
fixed sum or percentage of par or stated value in respect to  the
rights of the holders thereof to participate in dividends  or  in
the  distribution of assets upon any liquidation, dissolution  or
winding up of the Corporation.

      "Junior  Securities" means any of the Corporation's  equity
securities other than the Series A Stock.

      "Liquidation  Value"  of  any Series  A  Stock  as  of  any
particular  date will be equal to $250 per share plus all  unpaid
cumulative dividends on the Series A Stock.

      "Person" means an individual, a partnership, a corporation,
an  association, a joint stock company, a trust, a joint venture,
an  unincorporated organization and a governmental entity or  any
department, agency or political subdivision thereof.

      "Redemption Date" as to any Series A Stock means  the  date
specified  in  the notice of any redemption at the  Corporation's
option or the applicable date specified herein in the case of any
other redemption; provided that no such date will be a Redemption
Date unless the applicable Liquidation Value is actually paid  in
full  on  such date, and, if not so paid in full, the  Redemption
Date  will be the date on which Such Liquidation Value  is  fully
paid.

Part  8.   Amendment and Waiver.  No amendment,  modification  or
waiver will be binding or effective with respect to any provision
of  this  Section  I  without the prior written  consent  of  the
holders  of a majority of the Series A Stock outstanding  at  the
time  such  action  is taken; provided that no such  action  will
change the amount payable on redemption of the Series A Stock  or
the  times at which redemption of the Series A Stock is to occur,
or  the  percentage required to approve such change, without  the
prior  written  consent of the holders of at least two-thirds  of
the  Series A Stock then outstanding; and, provided further, that
no  change  in the terms hereof may be accomplished by merger  or
consolidation of the Corporation with another corporation  unless
the  Corporation has obtained the prior written  consent  of  the
holders  of the applicable percentage of the Series A Stock  then
outstanding.

Part  9.   Ranking.   For purposes hereof, all Junior  Securities
shall  be  deemed  to rank junior to the Series  A  Stock  as  to
dividends or distribution of assets upon liquidation, dissolution
or winding up.

                  II.  SERIES B PREFERRED STOCK

      Designation;  Number of Shares.  The  designation  of  such
series  of Preferred Stock (which includes all sub-series)  shall
be  "Series B Convertible Preferred Stock" (hereinafter  referred
to  as  the "Series B Stock") and the number of authorized shares
constituting  the  Series B Stock is Six Thousand  Eight  Hundred
Fifty-Eight  (6,858).  Of the Series B Stock,  Six  Thousand  Two
Hundred  Eighty-Six (6,286) shares are designated as "Series  B-1
Convertible  Preferred Stock" (hereinafter  referred  to  as  the
"Series  B-1 Stock"), Three Hundred Forty-Three (343) shares  are
designated   as   "Series   B-2  Convertible   Preferred   Stock"
(hereinafter  referred to as the "Series  B-2  Stock"),  and  Two
Hundred  Twenty-Nine (229) shares are designated as  "Series  B-3
Convertible  Preferred Stock" (hereinafter  referred  to  as  the
"Series  B-3  Stock").   The Series B Stock  shall  be  deemed  a
separate  class  of Preferred Stock, and each sub-series  of  the
Series  B Stock shall be apart from any other series of Preferred
Stock.

Part 1.  Liquidation.

      Upon  any  liquidation, dissolution, or winding up  of  the
Corporation, the holders of Series B Stock will be entitled to be
paid, after any distribution or payment is made upon any Series A
Stock  and before any distribution or payment is made upon Junior
Securities (as defined below under this Section II), an amount in
cash  equal to the aggregate Liquidation Value (as defined  below
under   this  Section  II)  of  all  shares  of  Series  B  Stock
outstanding,  and  the holders of Series  B  Stock  will  not  be
entitled  to  any further payment.  If upon any such liquidation,
dissolution,  or winding up of the Corporation, the Corporation's
assets to be distributed among the holders of Series B Stock  are
insufficient  to permit payment to such holders of the  aggregate
amount which they are entitled to be paid, then the entire assets
to  be distributed will be distributed ratably among such holders
based  upon the aggregate Liquidation Value of the Series B Stock
held  by  each  such holder.  The Corporation will  mail  written
notice  of such liquidation, dissolution, or winding up not  less
then  30  days prior to the payment date stated therein, to  each
record  holder  of Series B Stock.  Neither the consolidation  or
merger  of the Corporation into or with any other corporation  or
corporations, nor the sale or transfer by the Corporation of  all
or any part of its assets, nor the reduction of the capital stock
of   the   Corporation,  will  be  deemed  to   be   liquidation,
dissolution, or winding up of the Corporation within the  meaning
of Part 1 of this Section II.

Part 2.  Conversion Rights.

      2A.   Conversion Procedure.  Subject to the provisions  set
forth below, each share of Series B Stock shall be convertible at
the  option of the holder thereof, in the manner hereinafter  set
forth, into that number of fully paid and nonassessable shares of
Common Stock determined as set forth below.

     Any holder of Series B Stock desiring to convert such shares
into  shares  of Common Stock shall surrender the certificate  or
certificates  for  the shares being converted, duly  endorsed  or
assigned to the Corporation or in blank, at the principal  office
of  the Corporation or at the bank or trust company appointed  by
the Corporation for that purpose, accompanied by a written notice
of  conversion specifying the number of shares of Series B  Stock
to be converted and the name or names in which such holder wishes
the certificate or certificates for shares of Common Stock to  be
issued;  in case such notice shall specify a name or names  other
then that of such transfer taxes payable upon the issue of shares
of Common Stock in such name or names.  After the receipt of such
notice  of conversion, the Corporation shall, within thirty  (30)
days after receipt of such notice, issue and deliver or cause  to
be   issued  and  delivered  to  such  holder  a  certificate  or
certificates  for  shares  of Common Stock  resulting  from  such
conversion.   In  case less than all of the shares  of  Series  B
Stock  represented  by a certificate are to  be  converted  by  a
holder,  upon such conversion the Corporation shall also  deliver
or  cause  to  be  delivered  to such  holder  a  certificate  or
certificates for the shares of Series B stock not so converted.

      2B.   Conversion of Series B-1 Stock.  The right to convert
the  Series  B-1  Stock into shares of Common  Stock  shall  vest
immediately  on  the date of issuance of the  Series  B-1  Stock.
Each  share  of Series B-1 Stock is convertible into One  Hundred
(100) newly issued shares of Common Stock of the Corporation (the
"B-1 Conversion Rate").

      2C.   Conversion of Series B-2.  The right to  convert  the
Series  B-2  Stock  into  shares  of  Common  Stock  shall   vest
immediately  on  the date of issuance of the  Series  B-2.   Each
share  of  Series  B-2 Stock is convertible into Twenty-Six  (26)
newly  issued share of Common Stock of the Corporation (the  "B-2
Conversion Rate"), which is subject to adjustment as provided  in
Part 2C of this Section II.

      (i)   In  the event the gross revenue of Furash &  Company,
Inc.  ("FCI"),  the  wholly-owned subsidiary of  the  Corporation
acquired under that certain Agreement and Plan of Exchange  dated
December  23, 1994, to which the Corporation and FCI are  parties
("Exchange Agreement"), for the calendar year ending December 31,
1996,  equals  or  exceeds  $4,000,000,  as  determined  by   the
Corporation's   independent  accountants   in   accordance   with
Generally Accepted Accounting Principles, the B-2 Conversion Rate
for  each  share  of  Series  B-2 Stock  shall  automatically  be
increased on April 30, 1997, by an amount equal to 8,572  divided
by  the number of shares of Series B-2 Stock outstanding on April
30, 1997.  In the event the gross revenue of FCI for the calendar
year  ending December 31, 1996, exceeds $2,500,000 (but  is  less
than  $4,000,000), as determined by the Corporation's independent
accountants  in  accordance  with Generally  Accepted  Accounting
Principles, the B-2 Conversion Rate for each share of Series  B-2
Stock  shall automatically be increased on April 30, 1997, by  an
amount  determined by dividing 8,572 by the number of  shares  of
Series  B-2  Stock outstanding on April 30, 1997, and multiplying
the result by a fraction, the numerator of which is the amount by
which  gross  revenues exceed $2,500,000 for  the  calendar  year
ending  December  31,  1996,  and the  denominator  of  which  is
$1,500,000.   In  the  event the gross revenue  of  FCI  for  the
calendar   year  ending  December  31,  1996,  does  not   exceed
$2,500,000,  there  will be no adjustment in the  B-2  Conversion
Rate.

     (ii)  In the event the gross revenue of FCI for the calendar
year  ending December 31, 1997, equals or exceeds $4,000,000,  as
determined  by  the  Corporation's  independent  accountants   in
accordance with Generally Accepted Accounting Principles, the B-2
Conversion  Rate  for  each  share  of  Series  B-2  Stock  shall
automatically be increased on April 30, 1998, by an amount  equal
to  8,572  divided  by the number of shares of Series  B-2  Stock
outstanding on April 30, 1998.  In the event the gross revenue of
FCI  for  the  calendar year ending December  31,  1997,  exceeds
$2,500,000  (but is less than $4,000,000), as determined  by  the
Corporation's   independent  accountants   in   accordance   with
Generally Accepted Accounting Principles, the B-2 Conversion Rate
for  each  share  of  Series  B-2 Stock  shall  automatically  be
increased on April 30, 1998, by an amount determined by  dividing
8,572 by the number of shares of Series B-2 Stock outstanding  on
April  30,  1998, and multiplying the result by a  fraction,  the
numerator  of which is the amount by which gross revenues  exceed
$2,500,000  for the calendar year ending December 31,  1997,  and
the  denominator of which is $1,500,000.  In the event the  gross
revenue  of FCI for the calendar year ending December  31,  1997,
does not exceed $2,500,000, there will be no adjustment in the B-
2 Conversion Rate.

      (iii)   In  the  event the gross revenue  of  FCI  for  the
calendar  year  ending  December  31,  1998,  equals  or  exceeds
$4,000,000,   as  determined  by  the  Corporation's  independent
accountants  in  accordance  with Generally  Accepted  Accounting
Principles, the B-2 Conversion Rate for each share of Series  B-2
Stock  shall automatically be increased on April 30, 1999, by  an
amount equal to 8,572 divided by the number of shares of Series B-
2  Stock  outstanding on April 30, 1999.  In the event the  gross
revenue  of FCI for the calendar year ending December  31,  1998,
exceeds  $2,500,000 (but is less than $4,000,000), as  determined
by  the Corporation's independent accountants in accordance  with
Generally Accepted Accounting Principles, the B-2 Conversion Rate
for  each  share  of  Series  B-2 Stock  shall  automatically  be
increased on April 30, 1999, by an amount determined by  dividing
8,572 by the number of shares of Series B-2 Stock outstanding  on
April  30,  1999, and multiplying the result by a  fraction,  the
numerator  of which is the amount by which gross revenues  exceed
$2,500,000  for the calendar year ending December 31,  1998,  and
the  denominator of which is $1,500,000.  In the event the  gross
revenue  of FCI for the calendar year ending December  31,  1998,
does not exceed $2,500,000, there will be no adjustment in the B-
2 Conversion Rate.

      (iv)   In  the  event the employment of  Edward  E.  Furash
("Furash")  under that certain employment agreement  between  FCI
and  Furash included as an exhibit to the Exchange Agreement (the
"Employment Agreement"), is terminated by FCI during the  initial
four  year  term thereof ("Initial Term") for reasons other  than
cause as defined in paragraph 14 of the Employment Agreement,  or
is  terminated  during the Initial Term by either FCI  or  Furash
pursuant  to  paragraph 15 of the Employment Agreement,  the  B-2
Conversion  Rate  for  each  share  of  Series  B-2  Stock  shall
automatically be increased on the date of such termination by  an
amount  determined by multiplying 8,572 by the number of calendar
years  remaining in the unexpired Initial Term of the  Employment
Agreement  after  the  date  of termination  (with  each  partial
calendar  year in the unexpired Initial Term counted as one  full
year), and dividing the product by the number of shares of Series
B-2 Stock outstanding on the date of termination.

      2D.   Conversion of Series B-3.  The right to  convert  the
Series  B-3  Stock  into  shares  of  Common  Stock  shall   vest
immediately  on  the date of issuance of the  Series  B-3.   Each
share  of  Series  B-3 Stock is convertible into Twenty-Six  (26)
newly  issued share of Common Stock of the Corporation (the  "B-3
Conversion Rate"), which is subject to adjustment as provided  in
Part 2D of this Section II.

      (i)  In the event the gross revenue of FCI for the calendar
year  ending December 31, 1996, equals or exceeds $4,000,000,  as
determined  by  the  Corporation's  independent  accountants   in
accordance with Generally Accepted Accounting Principles, the B-3
Conversion  Rate  for  each  share  of  Series  B-3  Stock  shall
automatically be increased on April 30, 1997, by an amount  equal
to  5,714  divided  by the number of shares of Series  B-3  Stock
outstanding on April 30, 1997.  In the event the gross revenue of
FCI  for  the  calendar year ending December  31,  1996,  exceeds
$2,500,000  (but is less than $4,000,000), as determined  by  the
Corporation's   independent  accountants   in   accordance   with
Generally Accepted Accounting Principles, the B-3 Conversion Rate
for  each  share  of  Series  B-3 Stock  shall  automatically  be
increased on April 30, 1997, by an amount determined by  dividing
5,714 by the number of shares of Series B-3 Stock outstanding  on
April  30,  1997, and multiplying the result by a  fraction,  the
numerator  of which is the amount by which gross revenues  exceed
$2,500,000  for the calendar year ending December 31,  1996,  and
the  denominator of which is $1,500,000.  In the event the  gross
revenue  of FCI for the calendar year ending December  31,  1996,
does not exceed $2,500,000, there will be no adjustment in the B-
3 Conversion Rate.

     (ii)  In the event the gross revenue of FCI for the calendar
year  ending December 31, 1997, equals or exceeds $4,000,000,  as
determined  by  the  Corporation's  independent  accountants   in
accordance with Generally Accepted Accounting Principles, the B-3
Conversion  Rate  for  each  share  of  Series  B-3  Stock  shall
automatically be increased on April 30, 1998, by an amount  equal
to  5,714  divided  by the number of shares of Series  B-3  Stock
outstanding on April 30, 1998.  In the event the gross revenue of
FCI  for  the  calendar year ending December  31,  1997,  exceeds
$2,500,000  (but is less than $4,000,000), as determined  by  the
Corporation's   independent  accountants   in   accordance   with
Generally Accepted Accounting Principles, the B-3 Conversion Rate
for  each  share  of  Series  B-3 Stock  shall  automatically  be
increased on April 30, 1998, by an amount determined by  dividing
5,714 by the number of shares of Series B-3 Stock outstanding  on
April  30,  1998, and multiplying the result by a  fraction,  the
numerator  of which is the amount by which gross revenues  exceed
$2,500,000  for the calendar year ending December 31,  1997,  and
the  denominator of which is $1,500,000.  In the event the  gross
revenue  of FCI for the calendar year ending December  31,  1997,
does not exceed $2,500,000, there will be no adjustment in the B-
3 Conversion Rate.

      (iii)   In  the  event the gross revenue  of  FCI  for  the
calendar  year  ending  December  31,  1998,  equals  or  exceeds
$4,000,000,   as  determined  by  the  Corporation's  independent
accountants  in  accordance  with Generally  Accepted  Accounting
Principles, the B-3 Conversion Rate for each share of Series  B-3
Stock  shall automatically be increased on April 30, 1999, by  an
amount equal to 5,714 divided by the number of shares of Series B-
3  Stock  outstanding on April 30, 1999.  In the event the  gross
revenue  of FCI for the calendar year ending December  31,  1998,
exceeds  $2,500,000 (but is less than $4,000,000), as  determined
by  the Corporation's independent accountants in accordance  with
Generally Accepted Accounting Principles, the B-3 Conversion Rate
for  each  share  of  Series  B-3 Stock  shall  automatically  be
increased on April 30, 1999, by an amount determined by  dividing
5,714 by the number of shares of Series B-3 Stock outstanding  on
April  30,  1999, and multiplying the result by a  fraction,  the
numerator  of which is the amount by which gross revenues  exceed
$2,500,000  for the calendar year ending December 31,  1998,  and
the  denominator of which is $1,500,000.  In the event the  gross
revenue  of FCI for the calendar year ending December  31,  1998,
does not exceed $2,500,000, there will be no adjustment in the B-
3 Conversion Rate.

      (iv)   In  the  event the employment of  Furash  under  the
Employment  Agreement, is terminated by FCI  during  the  initial
four  year  term thereof ("Initial Term") for reasons other  than
cause as defined in paragraph 14 of the Employment Agreement,  or
is  terminated  during  the  Initial  Term  by  FCI  pursuant  to
paragraph 15 of the Employment Agreement, the B-3 Conversion Rate
for  each  share  of  Series  B-3 Stock  shall  automatically  be
increased on the date of such termination by an amount determined
by multiplying 5,714 by the number of calendar years remaining in
the  unexpired Initial Term of the Employment Agreement after the
date  of  termination  (with each partial calendar  year  in  the
unexpired  Initial Term counted as one full year),  and  dividing
the  product  by  the  number  of  shares  of  Series  B-3  Stock
outstanding on the date of termination.

      2E.   Fundamental  Changes.  In case the Corporation  shall
effect   any  stock  split,  reverse  stock  split,  or   capital
reorganization of the Common Stock, or shall consolidate,  merge,
or  engage  in a statutory share exchange with or into any  other
corporation  (other  than  a  consolidation,  merger,  or   share
exchange  in  which the Corporation is the surviving  corporation
and  each share of Common Stock outstanding immediately prior  to
such consolidation or merger is to remain outstanding immediately
after such consolidation or merger) or shall sell or transfer all
or  substantially all its assets to any other corporation, lawful
provision  shall  be  made  as  a  part  of  the  terms  of  such
transaction whereby the holders of shares of the Series  B  Stock
shall  receive upon conversion thereof, in lieu of each share  of
Common  Stock  which would have been issuable upon conversion  of
such stock if converted immediately prior to the consummation  of
such  transaction, the same kind and amount of  stock  (or  other
securities,  cash,  or property, if any) as may  be  issuable  or
distributable in connection with such transaction with respect to
each  share of Common Stock outstanding at the effective time  of
such transaction.

      2F.   Conversion Date.  Conversion shall be deemed to  have
been  made  as of the date of surrender of certificates  for  the
shares  of  Series  B Stock to be converted, and  the  giving  of
written  notice as prescribed in Part 2A of this Section II,  and
the  person  entitled to receive the Common Stock  issuable  upon
such  conversion shall be treated for all purposes as the  record
holder of such Common Stock on such date.  The Corporation  shall
not  be required to deliver certificates for shares of its Common
Stock  while the stock transfer books for such stock or  for  the
Series  B Stock are duly closed for any purpose, but certificates
for  shares of Common Stock shall be issued and delivered as soon
as practicable after the opening of such books.

      2G.  Converted Shares and Common Stock Held for Conversion.
Any  shares  of  Series  B Stock which  at  any  time  have  been
converted  shall  be canceled, may not be reissued  as  Series  B
Stock,  and  shall  be returned to the status of  authorized  and
unissued  shares  of Preferred Stock without  designation  as  to
series.   The  Corporation shall at all times  reserve  and  keep
available  out  of its authorized but unissued shares  of  Common
Stock,  for the purpose of issuance upon conversion of shares  of
Series  B  Stock  then  outstanding and  shall  take  all  action
necessary  so  that  shares of Common Stock  so  issued  will  be
validly issued, fully paid and nonassessable.

      2H.  Taxes.  The Corporation will pay any and all stamp  or
similar  taxes that may be payable in respect of the issuance  or
delivery  of  shares of Common Stock on conversion of  shares  of
Series  B Stock.  The Corporation shall not, however, be required
to  pay  any tax which may be payable in respect of any  transfer
involved  in  the issuance and delivery of shares of  Convertible
Stock  so  converted  were registered, and no  such  issuance  or
delivery  shall  be  made unless and until the person  requesting
such  issuance has paid to the Corporation the amount of any such
tax  or  has  established to the satisfaction of the  Corporation
that such tax has been paid.

Part 3.  Dividends.

      The  holders  of  Series  B  Stock  shall  be  entitled  to
participate fully with the Common Stock in all dividends, whether
payable  in  cash,  Common  Stock,  or  other  property  of   the
Corporation, when and as declared by the Corporation's  Board  of
Directors.  The dividend payable on each share of Series B-1,  B-
2,  and  B-3 Stock outstanding on the record date for determining
those persons entitled to receive a dividend on Common Stock  (or
on the date the dividend is paid if no record date is set), shall
be equal to the product of the dividend per share of Common Stock
multiplied by the B-1, B-2, and B-3 Conversion Rates, as the case
may  be,  in  effect  on such record date (or  on  the  date  the
dividend  is  paid if no record date is set) after giving  taking
into account all adjustments to such Conversion Rates required to
be made under Part 2 of this Section II, above, as of such record
date  (or on the date the dividend is paid if no record  date  is
set).   No  dividends shall be paid on the Series B Stock  unless
all dividends on the Corporation's Series A Convertible Preferred
Stock  ("Series  A  Stock"),  have  been  paid  or  reserved   in
accordance with the terms of the Series A Stock.

Part 4.  Voting Rights.

     Each share of Series B Stock shall have that number of votes
equal  to  the  number  of  shares of Common  Stock  issuable  on
conversion  of the Series B Stock as of the record  date  or  any
such other date with respect to which a determination is made  of
the  Persons  and number of shares entitled to be  voted  at  any
meeting  of the stockholders of the Corporation or sign a written
consent  to  action without a meeting, after giving  taking  into
account all adjustments to such Conversion Rates required  to  be
made under Part 2 of this Section II, above.  The holders thereof
shall have the right to vote (but not as a separate class, except
to  the extent required by law) on all matters subject to vote at
any  meeting of the stockholders of the Corporation or  submitted
for stockholder approval by written consent.

Part 5.  Definitions Applicable to Section II.

      "Business  Day"  shall mean a day other  than  a  Saturday,
Sunday  or  other day on which commercial banks in New York,  New
York are authorized by law to close.

     "Common Stock" means the Common Stock, $0.0001 par value per
share,  of the Corporation and any capital stock of any class  of
the  Corporation hereafter authorized which is not limited  to  a
fixed sum or percentage of par or stated value in respect to  the
rights of the holders thereof to participate in dividends  or  in
the distribution or assets upon any liquidation, dissolution,  or
winding up of the Corporation.

      "Junior  Securities" means any of the Corporation's  equity
securities other than the Series A Stock and Series B Stock.

      "Liquidation  Value"  of  any Series  B  Stock  as  of  any
particular date will be equal to $350 per share.

      "Person" means an individual, a partnership, a corporation,
an  association, a joint stock company, a trust, a joint venture,
an  unincorporated organization and a governmental entity or  any
department, agency or political subdivision thereof.

                 III.  SERIES C PREFERRED STOCK

      Designation;  Number of Shares.  The  designation  of  such
series  of Preferred Stock (which includes all sub-series)  shall
be  "Series C Convertible Preferred Stock" (hereinafter  referred
to  as  the "Series C Stock") and the number of authorized shares
constituting the Series C Stock is Twenty-Four (24).  The  Series
C  Stock shall be deemed a separate class of Preferred Stock, and
shall be apart from any other series of Preferred Stock.

Part 1.  Liquidation.

      Upon  any  liquidation, dissolution, or winding up  of  the
Corporation, the holders of Series C Stock will be entitled to be
paid, after any distribution or payment is made upon any Series A
Stock  and Series B Stock and before any distribution or  payment
is  made  upon  Junior Securities (as defined  below  under  this
Section   III),  an  amount  in  cash  equal  to  the   aggregate
Liquidation  Value (as defined below under this Section  III)  of
all  shares  of  Series C Stock outstanding, and the  holders  of
Series  C Stock will not be entitled to any further payment.   If
upon  any  such liquidation, dissolution, or winding  up  of  the
Corporation, the Corporation's assets to be distributed among the
holders  of Series C Stock are insufficient to permit payment  to
such  holders of the aggregate amount which they are entitled  to
be  paid,  then  the  entire assets to  be  distributed  will  be
distributed  ratably among such holders based upon the  aggregate
Liquidation Value of the Series C Stock held by each such holder.
The  Corporation  will mail written notice of  such  liquidation,
dissolution,  or winding up not less then 30 days  prior  to  the
payment  date stated therein, to each record holder of  Series  C
Stock.   Neither  the consolidation or merger of the  Corporation
into  or with any other corporation or corporations, nor the sale
or  transfer by the Corporation of all or any part of its assets,
nor  the reduction of the capital stock of the Corporation,  will
be  deemed to be liquidation, dissolution, or winding up  of  the
Corporation within the meaning of Part 1 of this Section III.

Part 2.  Dividends.

      2A.  Entitlement.  The holders of Series C Stock, shall  be
entitled  to receive cumulative dividends.  Such dividends  shall
be paid to the holders in cash or in-kind through the issuance of
Common  Stock, as determined at the election of the  Corporation,
on  conversion of the Series C Stock in accordance with Part 3 of
Section III, below, except as provided in Part 5 of Section  III,
below.

      2B.   Accrual Rate.  Dividends on each share  of  Series  C
Stock  shall  accrue on a daily basis at the rate of  8.000%  per
annum  of  the  Face Value (as defined below under  this  Section
III),  from and including the Date of Issuance of such  share  to
and  including the date on which the Redemption Price (as defined
below)  of such share is paid or the date on which such share  is
converted into Common Stock.  Such dividends shall accrue whether
or  not  they  have been declared and whether or  not  there  are
profits,  surplus  or  other  funds of  the  Corporation  legally
available  for the payment of dividends.  The date on  which  the
Corporation initially issues any share of the Series C Stock will
be  deemed  to  be its "Date of Issuance" as that  term  is  uses
herein,  regardless of the number of times transfer of  any  such
share  is  made  on the stock records maintained by  or  for  the
Corporation  and  regardless of the number of certificates  which
may be issued to evidence any such share.

Part 3.  Conversion Rights.

      3A.   Conversion Procedure.  Subject to the provisions  set
forth below, each share of Series C Stock shall be convertible at
the  option of the holder thereof, in the manner hereinafter  set
forth, into that number of fully paid and nonassessable shares of
Common Stock determined as set forth below.  Any holder of Series
C  Stock  desiring to convert such shares into shares  of  Common
Stock  shall  surrender the certificate or certificates  for  the
shares  being  converted,  duly  endorsed  or  assigned  to   the
Corporation  or  in  blank,  at  the  principal  office  of   the
Corporation  or  at the bank or trust company  appointed  by  the
Corporation for that purpose, accompanied by a written notice  of
conversion specifying the number of shares of Series C  Stock  to
be  converted  (provided that the number of shares  tendered  for
conversion  at  any one time shall not be less than  $100,000  in
Face Value) and the name or names in which such holder wishes the
certificate  or  certificates for shares of Common  Stock  to  be
issued.   The  date of execution of the notice of conversion  and
delivery thereof to the Corporation by facsimile transmission  at
(212) 508-3540 shall be the "Conversion Date"; provided, that  if
the  certificate representing the shares of Series C Stock to  be
converted  as stated in the notice of conversion is not  received
by  the Corporation or its designated agent within three business
days  of  receiving said facsimile transmission,  the  Conversion
Date  shall  be the date on which the Series C Stock certificates
are  actually  received by the Corporation or agent.   After  the
receipt of such notice of conversion and the certificates for the
Series  C  Stock converted, the Corporation shall promptly  issue
and deliver or cause to be issued and delivered to such holder  a
certificate or certificates for shares of Common Stock  resulting
from  such  conversion.   In case less than all of the shares  of
Series  C  Stock represented by a certificate are to be converted
by  a  holder,  upon such conversion the Corporation  shall  also
deliver or cause to be delivered to such holder a certificate  or
certificates  for the shares of Series C Stock not so  converted.
The  Corporation shall pay all transfer agent fees  and  expenses
payable upon the conversion of Series C Stock.

      3B.   Conversion  Rate.  The number of shares  issuable  on
conversion of the Series C Stock shall be determined by  dividing
the Face Value of the Series C Stock being converted plus (if the
Corporation elects to paid accrued dividends in-kind with  Common
Stock) the amount of accrued dividends on such Face Amount as  of
the  Conversion Date, by the lesser of (i) $4.558125, or (ii) 80%
of the market price on the Conversion Date.  For purposes of Part
3B  of this Section III, "market price" on a given date shall  be
the  average closing bid prices of the Common Stock for the  five
NASDAQ trading days immediately preceding the applicable date  as
reported  by  the  National  Association  of  Securities  Dealers
Automated  Quotation System or such other inter-dealer  quotation
system  as  may  report quotations on the Common Stock.   In  the
event  any fractional share of Common Stock would become issuable
under  the calculation contained in Part 3B of this Section  III,
the  number of shares issuable shall be rounded up to the nearest
whole number.

      3C.   Conversion Dates  The right to convert the  Series  C
Stock into shares of Common Stock shall vest over a 95-day period
following the Date of Issuance as set forth below:

      (i)   With respect to 33% of the shares of Series  C  Stock
held, 42 days following the Date of Issuance;

      (ii)  With respect to 33% of the shares of Series  C  Stock
held, 65 days following the Date of Issuance; and

      (iii)      With  respect to 34% of the shares of  Series  C
Stock held, 95 days following the Date of Issuance.

      3D.   Fundamental  Changes.  In case the Corporation  shall
effect   any  stock  split,  reverse  stock  split,  or   capital
reorganization of the Common Stock, or shall consolidate,  merge,
or  engage  in a statutory share exchange with or into any  other
corporation  (other  than  a  consolidation,  merger,  or   share
exchange  in  which the Corporation is the surviving  corporation
and  each share of Common Stock outstanding immediately prior  to
such consolidation or merger is to remain outstanding immediately
after such consolidation or merger) or shall sell or transfer all
or  substantially all its assets to any other corporation, lawful
provision  shall  be  made  as  a  part  of  the  terms  of  such
transaction whereby the holders of shares of the Series  C  Stock
shall  receive upon conversion thereof, in lieu of each share  of
Common  Stock  which would have been issuable upon conversion  of
such stock if converted immediately prior to the consummation  of
such  transaction, the same kind and amount of  stock  (or  other
securities,  cash,  or property, if any) as may  be  issuable  or
distributable in connection with such transaction with respect to
each  share of Common Stock outstanding at the effective time  of
such transaction.

      3E.  Converted Shares and Common Stock Held for Conversion.
Any  shares  of  Series  C Stock which  at  any  time  have  been
converted  shall  be canceled, may not be reissued  as  Series  C
Stock,  and  shall  be returned to the status of  authorized  and
unissued  shares  of Preferred Stock without  designation  as  to
series.   The  Corporation shall at all times  reserve  and  keep
available  out  of its authorized but unissued shares  of  Common
Stock,  for the purpose of issuance upon conversion of shares  of
Series  C  Stock  then  outstanding and  shall  take  all  action
necessary  so  that  shares of Common Stock  so  issued  will  be
validly issued, fully paid and nonassessable.

Part 4.  Voting Rights.

      The  Series C Stock shall have no voting rights, except  as
required in the specific instance by the Delaware Revise Statutes
and  except the right to approve by majority vote of the  holders
of  the  Series  C Stock: the authorization and issuance  of  any
class  or series of Preferred Stock senior to the Series C  Stock
which  is  not  authorized and issued as of March  1,  1996;  any
amendment,   modification,  or  repeal   of   the   articles   of
incorporation  of the Corporation if the powers, preferences,  or
special rights of the Series C Stock would be adversely affected;
and,  the  imposition of any restriction on the Series  C  Stock,
other  than  restrictions  arising  under  the  Delaware  Revised
Statutes  or existing under the articles of incorporation  as  in
effect at March 1, 1996.

Part 5.  Redemption.

      5A.   Redemption Price.  For each share of Series  C  Stock
which is to be redeemed, the Corporation will be obligated on the
Redemption  Date (as defined below) to pay to the holder  thereof
(upon  surrender  by  such holder at the Corporation's  principal
office or to the Corporation's transfer agent of the certificates
representing  such  shares  of  Series  C  Stock)  an  amount  in
immediately available funds equal to the Face Value thereof  plus
all  accrued dividends as of the Redemption Date; provided,  that
if  redemption  is effected pursuant to Part 5F of  this  Section
III,  the amount payable on the Redemption Date shall be 120%  of
the Face Value plus all accrued dividends as of that date.

      5B.   Notice  of  Redemption.  The  Corporation  will  mail
written  notice  of each redemption of Series  C  Stock  to  each
record holder of Series C Stock not more than sixty (60) nor less
than ten (10) days prior to the date on which such redemption  is
to  be made.  The date specified in such notice for redemption is
herein referred to as the "Redemption Date."

      5C.   Termination  of Rights.  On the Redemption  Date  all
rights  pertaining  to  the Series C Stock,  including,  but  not
limited to, any right of conversion, will cease, and such  Series
C Stock will not be deemed to be outstanding.

      5D.   Redeemed or Otherwise Acquire Shares.  Any shares  of
Series  C Stock which are redeemed or otherwise acquired  by  the
Corporation  shall be canceled, may not be reissued as  Series  C
Stock,  and  shall  be returned to the status of  authorized  and
unissued  shares  of Preferred Stock without  designation  as  to
series.

      5E.  Optional Redemption.  Except as provided in Part 5F of
this Section III, the Corporation may, at any time after April 1,
1997, redeem all or any portion of the Series C Stock.

      5F.   Redemption  upon Specific Event.  In  the  event  any
shares  of the Series C Stock are submitted for conversion  under
Part  3  of this Section III and the market price for the  Common
Stock on the Conversion Date as determined under Part 3B of  this
Section III is less than $2.00 per share, the Corporation may, at
its  option,  elect  to redeem the Series C  Stock  tendered  for
conversion rather than convert the shares.

Part 6.  Definitions Applicable to Section III.

      "Business  Day"  shall mean a day other  than  a  Saturday,
Sunday  or  other day on which commercial banks in New York,  New
York are authorized by law to close.

     "Common Stock" means the Common Stock, $0.0001 par value per
share,  of the Corporation and any capital stock of any class  of
the  Corporation hereafter authorized which is not limited  to  a
fixed sum or percentage of par or stated value in respect to  the
rights of the holders thereof to participate in dividends  or  in
the distribution or assets upon any liquidation, dissolution,  or
winding up of the Corporation.

     "Face Value" of any Series C Stock as of any particular date
will be equal to $20,000 per share.

      "Junior  Securities" means any of the Corporation's  equity
securities other than the Series A Stock and Series B Stock.

      "Liquidation  Value"  of  any Series  C  Stock  as  of  any
particular date will be equal to $20,000 per share.

      "Person" means an individual, a partnership, a corporation,
an  association, a joint stock company, a trust, a joint venture,
an  unincorporated organization and a governmental entity or  any
department, agency or political subdivision thereof.

                  IV.  SERIES D PREFERRED STOCK

      Designation;  Number of Shares.  The  designation  of  such
series   of  Preferred  Stock  shall  be  "Series  D  Convertible
Preferred  Stock"  (hereinafter referred  to  as  the  "Series  D
Stock")  and  the  number of authorized shares  constituting  the
Series  D Stock is Forty-Four (44).  The Series D Stock shall  be
deemed  a  separate class of Preferred Stock, and shall be  apart
from any other series of Preferred Stock.

Part 1.  Liquidation.

      Upon  any  liquidation, dissolution, or winding up  of  the
Corporation, the holders of Series D Stock will be entitled to be
paid,  after any distribution or payment is made upon any  Senior
Securities  and before any distribution or payment is  made  upon
Junior  Securities (as defined below under this Section  IV),  an
amount  in  cash  equal  to the aggregate Liquidation  Value  (as
defined  below under this Section IV) of all shares of  Series  D
Stock outstanding, and the holders of Series D Stock will not  be
entitled  to  any further payment.  If upon any such liquidation,
dissolution,  or winding up of the Corporation, the Corporation's
assets to be distributed among the holders of Series D Stock  are
insufficient  to permit payment to such holders of the  aggregate
amount which they are entitled to be paid, then the entire assets
to  be distributed will be distributed ratably among such holders
based  upon the aggregate Liquidation Value of the Series D Stock
held  by  each  such holder.  The Corporation will  mail  written
notice  of such liquidation, dissolution, or winding up not  less
then  30  days prior to the payment date stated therein, to  each
record  holder  of Series D Stock.  Neither the consolidation  or
merger  of the Corporation into or with any other corporation  or
corporations, nor the sale or transfer by the Corporation of  all
or any part of its assets, nor the reduction of the capital stock
of   the   Corporation,  will  be  deemed  to   be   liquidation,
dissolution, or winding up of the Corporation within the  meaning
of Part 1 of this Section IV.

Part 2.  Dividends.

      2A.  Entitlement.  The holders of Series D Stock, shall  be
entitled  to receive cumulative dividends.  Such dividends  shall
be paid to the holders in cash or in-kind through the issuance of
Common  Stock, as determined at the election of the  Corporation,
on  conversion of the Series D Stock in accordance with Part 3 of
Section  IV,  below, except as provided in Part 5 of Section  IV,
below.

      2B.   Accrual Rate.  Dividends on each share  of  Series  D
Stock  shall  accrue on a daily basis at the rate of  8.000%  per
annum of the Face Value (as defined below under this Section IV),
from  and  including the Date of Issuance of such  share  to  and
including  the  date on which the Redemption  Price  (as  defined
below)  of such share is paid or the date on which such share  is
converted into Common Stock.  Such dividends shall accrue whether
or  not  they  have been declared and whether or  not  there  are
profits,  surplus  or  other  funds of  the  Corporation  legally
available  for the payment of dividends.  The date on  which  the
Corporation initially issues any share of the Series D Stock will
be  deemed  to  be its "Date of Issuance" as that  term  is  used
herein,  regardless of the number of times transfer of  any  such
share  is  made  on the stock records maintained by  or  for  the
Corporation  and  regardless of the number of certificates  which
may be issued to evidence any such share.

Part 3.  Conversion Rights.

      3A.   Conversion Procedure.  Subject to the provisions  set
forth below, each share of Series D Stock shall be convertible at
the  option of the holder thereof, in the manner hereinafter  set
forth, into that number of fully paid and nonassessable shares of
Common Stock determined as set forth below.  Any holder of Series
D  Stock  desiring to convert such shares into shares  of  Common
Stock  shall  surrender the certificate or certificates  for  the
shares  being  converted,  duly  endorsed  or  assigned  to   the
Corporation  or  in  blank,  at  the  principal  office  of   the
Corporation  or  at the bank or trust company  appointed  by  the
Corporation for that purpose, accompanied by a written notice  of
conversion specifying the number of shares of Series D  Stock  to
be  converted  (provided that the number of shares  tendered  for
conversion  at  any one time shall not be less than  $100,000  in
Face Value) and the name or names in which such holder wishes the
certificate  or  certificates for shares of Common  Stock  to  be
issued.   The  date of execution of the notice of conversion  and
delivery thereof to the Corporation by facsimile transmission  at
(212) 508-3540 shall be the "Conversion Date"; provided, that  if
the  certificate representing the shares of Series D Stock to  be
converted  as stated in the notice of conversion is not  received
by  the Corporation or its designated agent within three business
days  of  receiving said facsimile transmission,  the  Conversion
Date  shall  be the date on which the Series D Stock certificates
are  actually  received by the Corporation or agent.   After  the
receipt of such notice of conversion and the certificates for the
Series  D  Stock converted, the Corporation shall promptly  issue
and deliver or cause to be issued and delivered to such holder  a
certificate or certificates for shares of Common Stock  resulting
from  such  conversion.   In case less than all of the shares  of
Series  D  Stock represented by a certificate are to be converted
by  a  holder,  upon such conversion the Corporation  shall  also
deliver or cause to be delivered to such holder a certificate  or
certificates  for the shares of Series D Stock not so  converted.
The  Corporation shall pay all transfer agent fees  and  expenses
payable upon the conversion of Series D Stock.

      3B.   Conversion  Rate.  The number of shares  issuable  on
conversion of the Series D Stock shall be determined by  dividing
the Face Value of the Series D Stock being converted plus (if the
Corporation elects to paid accrued dividends in-kind with  Common
Stock) the amount of accrued dividends on such Face Amount as  of
the  Conversion Date, by the lesser of (i) $5.210625, or (ii) 80%
of the market price on the Conversion Date.  For purposes of Part
3B  of  this Section IV, "market price" on a given date shall  be
the  average closing bid prices of the Common Stock for the  five
NASDAQ trading days immediately preceding the applicable date  as
reported  by  the  National  Association  of  Securities  Dealers
Automated  Quotation System or such other inter-dealer  quotation
system  as  may  report quotations on the Common Stock.   In  the
event  any fractional share of Common Stock would become issuable
under  the calculation contained in this Part 3B of this  Section
IV,  the  number of shares issuable shall be rounded  up  to  the
nearest whole number.

      3C.   Conversion Dates  The right to convert the  Series  D
Stock  into  shares  of Common Stock shall vest  over  a  100-day
period following the Date of Issuance as set forth below:

      (i)   With respect to 50% of the shares of Series  D  Stock
held, shall commence 70 days following the Date of Issuance; and

      (ii) With respect to any remaining shares of Series D Stock
held, shall commence 100 days following the Date of Issuance.

Any  shares  of Series D Stock that remain outstanding  at  12:01
a.m.,  New  York City time on June 1, 1998, shall there  upon  be
automatically converted to Common Stock without any action on the
part of the holder thereof, and all certificates that theretofore
represented  shares  of Series D Stock shall represent  only  the
right  to  receive  shares of Common Stock on  surrender  of  the
certificates  to the Corporation as provided in Part  3  of  this
Section IV.

      3D.   Fundamental  Changes.  In case the Corporation  shall
effect   any  stock  split,  reverse  stock  split,  or   capital
reorganization of the Common Stock, or shall consolidate,  merge,
or  engage  in a statutory share exchange with or into any  other
corporation  (other  than  a  consolidation,  merger,  or   share
exchange  in  which the Corporation is the surviving  corporation
and  each share of Common Stock outstanding immediately prior  to
such consolidation or merger is to remain outstanding immediately
after such consolidation or merger) or shall sell or transfer all
or  substantially all its assets to any other corporation, lawful
provision  shall  be  made  as  a  part  of  the  terms  of  such
transaction whereby the holders of shares of the Series  D  Stock
shall  receive upon conversion thereof, in lieu of each share  of
Common  Stock  which would have been issuable upon conversion  of
such stock if converted immediately prior to the consummation  of
such  transaction, the same kind and amount of  stock  (or  other
securities,  cash,  or property, if any) as may  be  issuable  or
distributable in connection with such transaction with respect to
each  share of Common Stock outstanding at the effective time  of
such transaction.

      3E.  Converted Shares and Common Stock Held for Conversion.
Any  shares  of  Series  D Stock which  at  any  time  have  been
converted  shall  be canceled, may not be reissued  as  Series  D
Stock,  and  shall  be returned to the status of  authorized  and
unissued  shares  of Preferred Stock without  designation  as  to
series..  The  Corporation shall at all times  reserve  and  keep
available  out  of its authorized but unissued shares  of  Common
Stock,  for the purpose of issuance upon conversion of shares  of
Series  D  Stock  then  outstanding and  shall  take  all  action
necessary  so  that  shares of Common Stock  so  issued  will  be
validly issued, fully paid and nonassessable.

Part 4.  Voting Rights.

      The  Series D Stock shall have no voting rights, except  as
required in the specific instance by the Delaware Revise Statutes
and  except the right to approve by majority vote of the  holders
of  the  Series  D Stock: the authorization and issuance  of  any
class  or series of Preferred Stock senior to the Series D  Stock
which  is  not  authorized  as of June 1,  1996;  any  amendment,
modification, or repeal of the articles of incorporation  of  the
Corporation if the powers, preferences, or special rights of  the
Series  D  Stock would be adversely affected; and, the imposition
of any restriction on the Series D Stock, other than restrictions
arising under the Delaware Revised Statutes or existing under the
articles of incorporation as in effect at June 1, 1996.

Part 5.  Redemption.

      5A.   Redemption Price.  For each share of Series  D  Stock
which is to be redeemed, the Corporation will be obligated on the
Redemption  Date (as defined below) to pay to the holder  thereof
(upon  surrender  by  such holder at the Corporation's  principal
office or to the Corporation's transfer agent of the certificates
representing  such  shares  of  Series  D  Stock)  an  amount  in
immediately  available  funds equal to 120%  of  the  Liquidation
Value  thereof  plus all accrued dividends as of  the  Redemption
Date.

      5B.   Redemption  upon Specific Event.  In  the  event  any
shares  of the Series D Stock are submitted for conversion  under
Part  3  of  this Section IV and the market price for the  Common
Stock on the Conversion Date as determined under Part 3B of  this
Section IV is less than $2.00 per share, the Corporation may,  at
its  option,  elect  to redeem the Series D  Stock  tendered  for
conversion rather than convert the shares.

      5C.   Notice  of  Redemption.  The  Corporation  will  mail
written  notice  of redemption of Series D Stock  to  the  record
holder  submitting  the  Series D Stock to  the  Corporation  for
conversion  not  later than the close of the  next  Business  Day
following  the  date on which the shares of Series  D  Stock  are
tendered  to the Corporation for conversion.  The date  specified
in  such  notice  for  redemption is herein referred  to  as  the
"Redemption Date."

      5D.   Termination  of Rights.  On the Redemption  Date  all
rights  pertaining  to  the Series D Stock,  including,  but  not
limited to, any right of conversion, will cease, and such  Series
D Stock will not be deemed to be outstanding.

      5E.   Redeemed or Otherwise Acquire Shares.  Any shares  of
Series  D Stock which are redeemed or otherwise acquired  by  the
Corporation  shall be canceled, may not be reissued as  Series  D
Stock,  and  shall  be returned to the status of  authorized  and
unissued  shares  of Preferred Stock without  designation  as  to
series.

Part 6.  Definitions Applicable to Section IV.

      "Business  Day"  shall mean a day other  than  a  Saturday,
Sunday  or  other day on which commercial banks in New York,  New
York are authorized by law to close.

     "Common Stock" means the Common Stock, $0.0001 par value per
share,  of the Corporation and any capital stock of any class  of
the  Corporation hereafter authorized which is not limited  to  a
fixed sum or percentage of par or stated value in respect to  the
rights of the holders thereof to participate in dividends  or  in
the distribution or assets upon any liquidation, dissolution,  or
winding up of the Corporation.

      "Junior  Securities" means any of the Corporation's  equity
securities other than the Senior Securities.

      "Liquidation  Value"  of  any Series  D  Stock  as  of  any
particular date will be equal to $50,000 per share.

      "Person" means an individual, a partnership, a corporation,
an  association, a joint stock company, a trust, a joint venture,
an  unincorporated organization and a governmental entity or  any
department, agency or political subdivision thereof.

      "Senior Securities" means the Corporation's Series A Stock,
Series B Stock, and Series C Stock.

                  V.  SERIES E PREFERRED STOCK

      Designation;  Number of Shares.  The  designation  of  such
series   of  Preferred  Stock  shall  be  "Series  E  Convertible
Preferred  Stock"  (hereinafter referred  to  as  the  "Series  E
Stock")  and  the  number of authorized shares  constituting  the
Series  E  Stock is Five Hundred Seventy-Five Thousand (575,000).
The  Series E Stock shall be deemed a separate class of Preferred
Stock,  and  shall  be apart from any other series  of  Preferred
Stock.

Part 1.  Liquidation.

      Upon  any  liquidation, dissolution, or winding up  of  the
Corporation, the holders of Series E Stock will be entitled to be
paid,  after any distribution or payment is made upon any  Senior
Securities  and before any distribution or payment is  made  upon
Junior  Securities (as defined below under this  Section  V),  an
amount  in  cash  equal  to the aggregate Liquidation  Value  (as
defined  below under this Section V) of all shares  of  Series  E
Stock outstanding, and the holders of Series E Stock will not  be
entitled  to  any further payment.  If upon any such liquidation,
dissolution,  or winding up of the Corporation, the Corporation's
assets to be distributed among the holders of Series E Stock  are
insufficient  to permit payment to such holders of the  aggregate
amount which they are entitled to be paid, then the entire assets
to  be distributed will be distributed ratably among such holders
based  upon the aggregate Liquidation Value of the Series E Stock
held  by  each  such holder.  The Corporation will  mail  written
notice  of such liquidation, dissolution, or winding up not  less
than  30  days prior to the payment date stated therein, to  each
record  holder  of Series E Stock.  Neither the consolidation  or
merger  of the Corporation into or with any other corporation  or
corporations, nor the sale or transfer by the Corporation of  all
or any part of its assets, nor the reduction of the capital stock
of   the   Corporation,  will  be  deemed  to   be   liquidation,
dissolution, or winding up of the Corporation within the  meaning
of Part 1 of this Section V.

Part 2.  Conversion Rights.

      2A.   Conversion Procedure.  Subject to the provisions  set
forth below, each share of Series E Stock shall be convertible at
the  option of the holder thereof, in the manner hereinafter  set
forth, into that number of fully paid and nonassessable shares of
Common Stock determined as set forth below.  Any holder of Series
E  Stock  desiring to convert such shares into shares  of  Common
Stock  shall  surrender the certificate or certificates  for  the
shares  being  converted,  duly  endorsed  or  assigned  to   the
Corporation  or  in  blank,  at  the  principal  office  of   the
Corporation  or  at the bank or trust company  appointed  by  the
Corporation for that purpose, accompanied by a written notice  of
conversion specifying the number of shares of Series E  Stock  to
be  converted  and the name or names in which such holder  wishes
the certificate or certificates for shares of Common Stock to  be
issued;  in case such notice shall specify a name or names  other
than that of such transfer taxes payable upon the issue of shares
of Common Stock in such name or names.  After the receipt of such
notice  of conversion, the Corporation shall, within thirty  (30)
days after receipt of such notice, issue and deliver or cause  to
be   issued  and  delivered  to  such  holder  a  certificate  or
certificates  for  shares  of Common Stock  resulting  from  such
conversion.    In case less than all of the shares  of  Series  E
Stock  represented  by a certificate are to  be  converted  by  a
holder,  upon such conversion the Corporation shall also  deliver
or  cause  to  be  delivered  to such  holder  a  certificate  or
certificates for the shares of Series E stock not so converted.

      2B.   Conversion Privilege and Rate.  The right to  convert
the  Series  E  Stock  into  shares of Common  Stock  shall  vest
immediately on the date of issuance of the Series E Stock.   Each
share  of Series E Stock is convertible into One (1) newly issued
share of Common Stock of the Corporation (the "Conversion Rate"),
which  is  subject to adjustment as provided in Part 2C  of  this
Section  V,  below; provided, however, that shares  of  Series  E
Stock may be converted into shares of Common Stock only after the
holder  of such shares of Series E Stock shall have certified  to
the  Corporation  that it is not a "bank holding  company"  or  a
"subsidiary"  of a "bank holding company" within the  meaning  of
Section  4  of the Bank Holding Company Act of 1954, as  amended,
and  Regulation Y promulgated thereunder, or one of the following
shall  have  occurred:  (1) the bona fide sale to  any  purchaser
(including,  without limitation, any underwriter) of such  shares
of  Series  E  Stock  (x)  pursuant to a  registration  statement
declared  effective  by  the Securities and  Exchange  Commission
under  the  Securities  Act  of 1933,  as  amended  (the  "Act"),
covering the offer and sale of the Corporation's common stock  in
a  bona  fide public offering, or (y) pursuant to Rules  144  and
144A  promulgated  under  the Act, or in  a  public  distribution
pursuant  to  Regulation A of the General Rules  and  Regulations
under  the Act; (2) the bona fide sale to any purchaser  of  such
shares of Series E Stock in a transaction not involving a sale of
the  Corporation's common stock to the public, provided that such
purchaser does not immediately after such transaction hold shares
of  Common Stock (including any shares converting to Common Stock
in  accordance herewith) equaling two percent (2%) or more of the
then-outstanding shares of Common Stock; or (3)  the  receipt  by
the  Corporation of (y) a staff opinion, ruling or other  written
advice from the Board of Governors of the Federal Reserve System,
or  from  the appropriate Federal Reserve Bank, or (z) an opinion
of  counsel experienced in bank regulatory matters, in each  case
to the effect that such shares of Series E Stock may be converted
into shares of Common Stock without violation of Section 4 of the
Bank  Holding  Company Act of 1954, as amended, and Regulation  Y
promulgated thereunder.

      2C.  Adjustment of Conversion Rate.  The Conversion Rate is
subject  to  adjustment from time to time upon the occurrence  of
any  of the events enumerated in Part 2C of this Section V.  Such
adjustments shall be made in respect of any such events occurring
from  and after the date on which any warrants to purchase shares
of Series E Stock are first issued and shall be applicable to all
authorized  shares  of Series E Stock whether  or  not  any  such
shares are issued and outstanding.

       a.    Adjustment  for  Change  in  Capital  Stock  of  the
Corporation. If the Corporation (i) pays a dividend  or  makes  a
distribution  on any class of its Common Stock in shares  of  any
class of its Common Stock, (ii) subdivides its outstanding shares
of  any  class of Common Stock into a greater number  of  shares,
(iii)  combines  its outstanding shares of any  class  of  Common
Stock  into a smaller number of shares, (iv) makes a distribution
on  any  class of its Common Stock in shares of its  Stock  other
than Common Stock, or (v) issues by reclassification of any class
of  its Common Stock any shares of its Stock, then the Conversion
Rate  in  effect  immediately  prior  to  such  action  shall  be
proportionately adjusted so that any holder of any Series E Stock
(a  "Holder")  thereafter  exercised may  receive  the  aggregate
number  and  kind  of shares of capital stock of the  Corporation
which  it  would have owned immediately following such action  if
such  Series E Stock had been issued and outstanding (if not then
issued  and outstanding) and converted immediately prior to  such
action.  Such adjustment shall be made successively whenever  any
event  listed  above  shall  occur, and  shall  become  effective
immediately  after the record date in the case of a  dividend  or
distribution and immediately after the effective date in the case
of  a  subdivision, combination or reclassification. If after  an
adjustment a Holder may receive shares of two or more classes  of
capital stock of the Corporation, the Board of Directors  of  the
Corporation  shall determine in the good faith  exercise  of  its
reasonable  business  judgment the  allocation  of  the  adjusted
Conversion Rate between the classes of capital stock.  After such
allocation,  the  exercise privilege and the Conversion  Rate  of
each  class  of  capital  stock shall thereafter  be  subject  to
adjustment  on  terms comparable to those  in  Part  2C  of  this
Section V.

     b.   Adjustment for Common Stock Issues.  If the Corporation
issues shares of Common Stock for a consideration per share  less
than the Fair Market Value per Share (as defined in paragraph (1)
of  Part 2C of this Section V) on the date the Corporation  fixes
the offering price of such additional shares, the Conversion Rate
shall be adjusted in accordance with the following formula:

E' = E x   A
        ______
             P
             _
         O + M

where:

E' = the adjusted Conversion Rate;

E = the then current Conversion Rate;

O  = the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares;

P = the aggregate consideration received for the issuance of such
additional shares;

M  =  the Fair Market Value per Share on the date the Corporation
fixes the offering price of such additional shares; and

A  = the number of shares of Common Stock outstanding immediately
after the issuance of such additional shares.

The  adjustment  shall  be made successively  whenever  any  such
issuance  is  made, and shall become effective immediately  after
such  issuance.   The provisions of this subsection  (b)  do  not
apply (i) to any of the transactions described in subsection  (a)
of Part 2C of this Section V or (ii) any transaction for which an
adjustment has been made pursuant to the provisions of paragraphs
(c) or (d) of Part 2C of this Section V or (iii) the issuance  of
any  Excluded Shares (as defined in paragraph (l) of Part  2C  of
this Section V).

      c.    Adjustment for Convertible Securities Issues.  If the
Corporation issues any evidences of indebtedness, shares of stock
or  other  securities which are convertible into or exchangeable,
with  or  without payment of additional consideration in cash  or
property,  for shares of Stock, either immediately  or  upon  the
occurrence of a specified date or a specified event ("Convertible
Securities"), other than shares of Series E Stock  for  which  an
adjustment has been made pursuant to the provisions of subsection
(d)  of  Part 2C of this Section V, whether or not the  right  to
convert or exchange thereunder is immediately exercisable  or  is
conditioned   upon  the  passage  of  time,  the  occurrence   or
non-occurrence of some other event, or both, for a  consideration
per  share  of  Stock  initially deliverable upon  conversion  or
exchange of such Convertible Securities less than the Fair Market
Value  per  Share  on  the date of issuance of  such  Convertible
Securities,  the Conversion Rate shall be adjusted in  accordance
with this formula:



E' = E x O + D
         _____
             P
             _
         O + M

where:

E' = the adjusted Conversion Rate;

E = the then current Conversion Rate;

O  = the number of shares of Common Stock outstanding immediately
prior to the issuance of such Convertible Securities;

P = the aggregate consideration received for the issuance of such
Convertible Securities; and

M  =  the Fair Market Value per Share on the date of issuance  of
such Convertible Securities; and

D = the maximum number of shares of Common Stock deliverable upon
exercise,   conversion  or  in  exchange  of   such   Convertible
Securities at the Minimum Price.

In this subsection (c), the term "Minimum Price" means the lowest
price  at which the Convertible Securities can be converted  into
or  exchanged for Common Stock, regardless of whether that is the
initial  rate  or is conditioned upon the passage  of  time,  the
occurrence or non-occurrence of some other event, or  both.   The
adjustment shall be made successively whenever any such  issuance
is  made,  and  shall  become effective  immediately  after  such
issuance.   If  all of the Stock deliverable upon  conversion  or
exchange of such Convertible Securities has not been issued  when
such  Convertible Securities are no longer outstanding, then  the
Conversion  Rate shall promptly be readjusted to  the  Conversion
Rate  which would then be in effect had the adjustment  upon  the
issuance of such Convertible Securities been made on the basis of
the  actual  number of shares of Stock issued upon conversion  or
exchange of such Convertible Securities.

      d.    Adjustment for Right, Option and Warrant Issues.   If
the  Corporation  issues  any  rights,  options  or  warrants  to
subscribe for or purchase or otherwise acquire Stock, whether  or
not  the  right to exercise such rights, options or  warrants  is
immediately  exercisable or is conditioned upon  the  passage  of
time,  the  occurrence or non-occurrence of some other event,  or
both (the "Option Securities"), for a consideration per share  of
Stock   initially  deliverable  upon  exercise  of  such   Option
Securities less than the Fair Market Value per Share on the  date
of  issuance of such Option Securities, the Conversion Rate shall
be adjusted in accordance with this formula:

E' = E x O + D
         _____
             P
             _
         O + M

where:

E' = the adjusted Conversion Rate;

E = the then current Conversion Rate;

O  = the number of shares of Common Stock outstanding immediately
prior to the issuance of such Option Securities;

P = the aggregate consideration received for the issuance of such
Option Securities;

M  =  the Fair Market Value per Share on the date of issuance  of
such Option Securities; and

D = the maximum number of shares of Common Stock deliverable upon
exercise, conversion or in exchange of such Option Securities  at
the Minimum Price.

As  used  in this subsection (d), the term "Minimum Price"  means
the  lowest price at which the Option Securities may be exercised
to  purchase  or  otherwise acquire Common Stock,  regardless  of
whether  that  is  the initial price or is conditioned  upon  the
passage  of time, the occurrence or non-occurrence of some  other
event,  or  both.   The  adjustment shall  be  made  successively
whenever  any  such issuance is made, and shall become  effective
immediately  after  such issuance.  If all of  the  Common  Stock
deliverable upon exercise of such Option Securities has not  been
issued  when  such  Option Securities are no longer  outstanding,
then  the  Conversion Rate shall promptly be  readjusted  to  the
Conversion  Rate which would then be in effect had the adjustment
upon  the  issuance of such Option Securities been  made  on  the
basis of the actual number of shares of Common Stock issued  upon
such exercise of such Option Securities.

       e.     Consideration  Received.   For  purposes   of   any
computation  respecting consideration received  pursuant  to  any
subsection  of  Part  2C of this Section V, the  following  shall
apply:

      (1)   in the case of the issuance of shares of Common Stock
for  cash, the consideration received shall be the amount of cash
received by the Corporation therefor, without deduction therefrom
of  any  reasonable  expenses  incurred  by  the  Corporation  in
connection  therewith or any reasonable underwriters'  discounts,
fees  and  commissions  paid or allowed  by  the  Corporation  in
connection therewith.

      (2)   in the case of the issuance of shares of Common Stock
for  a consideration consisting in whole or in part of other than
cash, the consideration other than cash shall be deemed to be the
fair market value thereof as determined by the Board of Directors
of  the  Corporation in the good faith exercise of  its  business
judgment, without deduction therefrom of any reasonable  expenses
incurred  by  the  Corporation in connection therewith.   In  any
circumstances  in  which  the  fair  market  value  of  any  such
consideration is to be determined pursuant to this paragraph (2),
the   Corporation  shall  give  to  the  Holders  (or,  if   such
determination  affects  less than all  of  the  Holders,  to  the
Holders  so affected) written notice of the proposed fair  market
value,  as determined in good faith by the Board of Directors  of
the Corporation.  If, within thirty (30) days after the date such
notice is given, the Corporation and such Holders agree upon  the
fair market value then the fair market value for purposes of this
paragraph  (2)  shall be as so agreed.  If such Holders  and  the
Corporation do not agree upon such fair market value within  such
30-day period, then the Required Holders (as defined in paragraph
(l)  of  Part  2C  of  this Section V) and the Corporation  shall
appoint   a  recognized  investment  banking  firm  of   national
reputation, reasonably acceptable to the Required Holders and the
Corporation.  If the Corporation and the Required Holders  cannot
agree  on  the  appointment of a mutually  acceptable  investment
banking  firm, or if the firm so appointed declines or  fails  to
serve,  then the Required Holders and the Corporation shall  each
choose one such investment banking firm and the respective  firms
so  chosen  shall  appoint another recognized investment  banking
firm  of  national reputation.  The investment  banking  firm  so
selected shall appraise the fair market value for the purposes of
this  paragraph (2), and such investment banking firm shall  make
such  appraisal  (which shall be in the form of a written  report
signed by such investment banking firm) and, for the purposes  of
determining the fair market value pursuant to this paragraph (2),
such  appraised  fair market value determined as herein  provided
shall be final and conclusive on the Corporation and the Holders.
If  the  fair market value of the consideration as determined  by
such  investment  banking firm is equal  to  or  less  than  that
determined  by  the  Board of Directors  of  the  Corporation  in
accordance with this paragraph (2), then all fees and expenses of
such  investment  banking  firm shall be  paid  by  the  Required
Holders requesting such appraisal.  If the appraised fair  market
value  of  the  consideration as determined  by  such  investment
banking  firm  is greater than that determined by  the  Board  of
Directors  in accordance with this paragraph (2), then  all  fees
and expenses of such investment banking firm shall be paid by the
Corporation.

      (3)   in the case of the issuance of Convertible Securities
or  securities  issuable upon the exercise of Option  Securities,
the aggregate consideration received therefor shall be deemed  to
be the consideration received by the Corporation for the issuance
of  such Convertible Securities, plus the consideration, if  any,
received  by  the  Corporation for the issuance  of  such  Option
Securities, plus the additional minimum consideration, if any, to
be  received by the Corporation upon the conversion, exchange  or
exercise thereof (the consideration in each case to be determined
in  the  same manner as provided in clauses (1) and (2)  of  this
subsection (e)).

      f.    Special Adjustments.  If the purchase price  provided
for  in  any Option Securities, the additional consideration,  if
any,  payable upon the conversion or exchange of any  Convertible
Securities  or  the rate at which any Convertible Securities  are
convertible  into  or exchangeable for Stock  shall  change,  the
Conversion  Rate  in  effect at the  time  of  such  event  shall
forthwith  be readjusted.  The Conversion Rate shall be  adjusted
to those amounts which would have been in effect at such time had
such  Option Securities or Convertible Securities outstanding  at
such  time  initially  been  granted,  issued  or  sold  and  the
Conversion  Rate initially adjusted as provided in the applicable
subsection   of  Part  2C  of  this  Section  V,  whichever   was
applicable,   except  that  the  minimum  amount  of   additional
consideration  payable  and the total maximum  number  of  shares
issuable  shall be determined after giving effect to  such  event
(and any prior event or events).

      g.    When No Adjustment Required.  No adjustment  need  be
made for a change in the par value or absence of par value of any
Common Stock.  No adjustment in the Conversion Rate need be  made
unless  adjustment would require an increase or  decrease  of  at
least  1% of the Conversion Rate.  Any adjustments that  are  not
made  but  deferred pursuant to this subsection shall be  carried
forward and taken into account in any subsequent adjustment.

     h.   Determination of Fair Market Value per Share; Notice of
Adjustment.   Prior  to issuing any shares of Common  Stock,  any
Convertible  Securities or any Option Securities, the Corporation
shall  cause  the  Board  of  Directors  of  the  Corporation  to
determine  in good faith the Fair Market Value per Share,  as  of
the  date  on which the Corporation fixes the offering  price  of
such  shares  or  as of the date of issuance of such  Convertible
Securities or Option Securities, as the case may be.  Within five
(5)  days of such determination by the Board of Directors of  the
Corporation, but in no event later than thirty (30) days prior to
issuance  of such Common Stock, Convertible Securities or  Option
Securities, the Corporation shall give the Holders written notice
of  the  proposed Fair Market Value per Share.   If  within  such
thirty  (30)  day period, the Corporation and such Holders  agree
upon  the Fair Market Value per Share, then the Fair Market Value
per Share shall be as so agreed.  If, within such thirty (30) day
period,  the Corporation and the Required Holders (as defined  in
paragraph  (l)  of Part 2C of this Section V) do not  agree  upon
such Fair Market Value per Share, then the Fair Market Value  per
Share  shall  be  determined as provided in  clause  (b)  of  the
definition thereof.

      i.   When Issuance or Payment May Be Deferred.  In any case
in  which  Part  2C  of  this Section V  shall  require  that  an
adjustment  in  the  Conversion Rate be made effective  as  of  a
record  date for a specified event, the Corporation may elect  to
defer  until  the  occurrence of such event (i)  issuing  to  the
Holder of any Series E Stock converted after such record date the
shares of Stock issuable upon such conversion over and above  the
shares of Stock issuable upon such conversion on the basis of the
Conversion Rate prior to such adjustment and (ii) paying to  such
Holder  any amount in cash in lieu of a fractional share pursuant
to  paragraph (j), provided, however, that the Corporation  shall
deliver  to  such  Holder a bill or other appropriate  instrument
evidencing such Holder's right to receive such additional  shares
of stock and cash upon the occurrence of the event requiring such
adjustment.

      j.    Fractional Interests.  The Corporation shall  not  be
required  to  issue  fractional shares of  Common  Stock  on  the
conversion  of  the  Series E Stock.   If  more  than  one  share
certificate shall be presented for conversion in full at the same
time  by  the  same Holder, the number of full shares  of  Common
Stock  which shall be issuable upon conversion thereof  shall  be
computed  on the basis of the aggregate number of shares issuable
on  conversion  of  the  Series E Stock evidenced  by  all  share
certificates  so  presented.  If any fraction of  the  shares  of
Common Stock would, except for the provisions of Part 2C of  this
Section  V, be issuable on conversion of any shares of  Series  E
Stock  (or specified portion thereof), the Corporation shall  pay
an amount in cash equal to the Fair Market Value per Share on the
day   immediately  preceding  the  date  the  share   certificate
evidencing  such  Series  E  Stock is presented  for  conversion,
multiplied by such fraction.

      k.    Par Value of Common Stock.  Before taking any  action
which  (i)  would  cause  an adjustment in  the  Conversion  Rate
pursuant to Part 2C of this Section V such that the aggregate par
value of the shares of Common Stock (including fractional shares)
into  which  a share of Series E Stock is convertible is  greater
than  $0.02 per share or (ii) would otherwise result in  the  par
value  of  the Common Stock increasing to greater than $0.02  per
share,  the Corporation shall receive the consent of the Required
Holders  to  such adjustment or change in the par  value  of  the
Common  Stock  and shall take any corporate action  necessary  in
order  that  the Corporation may validly and legally issue  fully
paid and nonassessable shares of Common Stock on the basis of the
Conversion Rate as so adjusted.

      l.    Definitions.  For purposes of Part 2C of this Section
V, the following terms shall have the following meanings:

      (1)  "Excluded Shares" means (i) shares of Common Stock  to
be issued upon exercise or conversion of the Corporation's Series
A  Convertible  Preferred Stock, Series B  Convertible  Preferred
Stock, Series C Convertible Preferred Stock, Series D Convertible
Preferred Stock, Series E Stock, and warrants to purchase  Series
E  Stock, (ii) shares of Stock issued on exercise of warrants  to
purchase  Common  Stock  which the Board  of  Directors  has,  by
resolution duly adopted prior to May 31, 1996, authorized  to  be
granted or issued, not to exceed 809,711 shares, and (iii) shares
of  Stock  issued  to officers, directors, or  employees  of,  or
consultants to, the Corporation upon exercise of any stock option
granted  on or prior to May 31, 1996, not in excess of  1,151,113
shares,  plus  shares  issued  or options  granted  to  employees
pursuant  to  a stock option plan approved in good faith  by  the
Board  of  Directors of the Corporation after May 31,  1996,  not
exceeding 500,000 shares.

      (2)   "Fair  Market Value per Share" means the fair  market
value of a share of Common Stock of the Corporation, and shall be
equal  to  the  quotient  of (i) the fair  market  value  of  the
Corporation and its subsidiaries taken as a whole on the date  of
determination,  taking  into account  all  the  factors  relevant
thereto, including, without limitation, the highest of the prices
that  could  be obtained from an arms' length sale  without  time
constraints of (A) all or substantially all of the assets of  the
Corporation and the subsidiaries subject to or after satisfaction
of all liabilities of the Corporation and the subsidiaries or (B)
all   of  the  Fully  Diluted  Shares  of  Common  Stock  of  the
Corporation,  whether  by  stock sale, merger,  consolidation  or
otherwise, divided by (ii) the number of Fully Diluted Shares  of
Common Stock on the date of determination.  In no event shall the
Fair Market Value per Share be reduced or discounted on the basis
that any securities to be valued on the basis of such Fair Market
Value  per  Share may represent the fight to acquire  a  minority
interest  in  the  Corporation or may not be freely  transferable
under  federal or state securities laws, or for any other reason.
The  Fair  Market Value per Share shall be determined as provided
in clause (X) or (Y) below, as applicable.

           (X)   In  any  circumstances in which the Fair  Market
Value per Share is required to be determined, not later than  ten
(10)  days  following the date as of which such determination  is
required  to  be made, the Board of Directors of the  Corporation
shall  determine in good faith the Fair Market Value  per  Share,
and  the  Corporation  shall give to the  Holders  (or,  if  such
determination  affects  less than all  of  the  Holders,  to  the
Holders so affected) prompt written notice of such determination.
If  within thirty (30) days after the date such notice is  given,
the  Corporation  and the Required Holders agree  upon  the  Fair
Value per Share, then the Fair Market Value per Share shall be as
so agreed.  If within such 30-day period, the Corporation and the
Required  Holders  do not agree upon such Fair Market  Value  per
Share,  then the Fair Market Value per Share shall be  determined
as provided in clause (Y) of this definition.

          (Y)  If the Required Holders and the Corporation do not
agree  upon  such Fair Market Value per Share within  the  30-day
period  specified  in  clause (X) of this  definition,  then  the
Required  Holders and the Corporation shall appoint a  recognized
investment   banking  firm  of  national  reputation,  reasonably
acceptable to the Required Holders and the Corporation.   If  the
Corporation  and  the  Required  Holders  cannot  agree  on   the
appointment of a mutually acceptable investment banking firm,  or
if  the  firm so appointed declines or fails to serve,  then  the
Required  Holders and the Corporation shall each choose one  such
investment banking firm and the respective firms so chosen  shall
appoint  another recognized investment banking firm  of  national
reputation.   The  investment  banking  firm  so  selected  shall
appraise the value of the Corporation (which shall be in the form
of  a written report signed by such investment banking firm), and
such  appraised  value  of the Corporation determined  as  herein
provided  shall  be  final  and conclusive  and  binding  on  the
Corporation  and  the  Holders.  If the appraised  value  of  the
Corporation  as  determined by such investment  banking  firm  is
equal  to  or less than that determined by the Board of Directors
of  the  Corporation  in  accordance  with  clause  (X)  of  this
definition, then all fees and expenses of such investment banking
firm  shall  be  paid  by  the Required Holders  requesting  such
appraisal.   If  the  appraised  value  of  the  Corporation   as
determined by such investment banking firm is greater  than  that
determined  by the Board of Directors in accordance  with  clause
(X)  of  this  definition, then all fees  and  expenses  of  such
investment banking firm shall be paid by the Corporation.

      (3)   "Fully  Diluted Shares" means,  as  of  any  date  of
determination,  the  number of shares  of  Common  Stock  of  the
Corporation  equal  to the sum of (i) the  number  of  shares  of
Common Stock outstanding on such date of determination, plus (ii)
the  number  of shares issuable upon conversion of the  Series  E
Stock as of such date of determination, plus (iii) the number  of
shares  of  Common Stock that would be issued in respect  of  all
Option  Securities of the Corporation outstanding and immediately
exercisable  as  of  such date of determination  if  such  Option
Securities  were to be converted into shares of Common  Stock  in
accordance with the following formula:

X = Y(A-B)
    ______
      A

where:

X  =  the  number of shares to be issued to the holders  of  such
Option Securities;

Y  =  the  number of shares for which such Option Securities  are
exercisable;

A  =  the Fair Market Value per Share determined on the basis  of
the  then  outstanding Common Stock and assuming that all  Option
Securities outstanding are converted to Common Stock  as  of  the
date of determination: and

B = the exercise price for such Option Securities.

      (4)   "Required Holders" means the Holders holding at least
66-2/3% of the Series E Stock outstanding.

     (5)  "Stock" means any capital stock of the Corporation.

      2D.   Conversion Date.  Conversion shall be deemed to  have
been  made  as of the date of surrender of certificates  for  the
shares  of  Series  E Stock to be converted, and  the  giving  of
written  notice as prescribed in Part 2A of this Section  V,  and
the  person  entitled to receive the Common Stock  issuable  upon
such  conversion shall be treated for all purposes as the  record
holder of such Common Stock on such date.  The Corporation  shall
not  be required to deliver certificates for shares of its Common
Stock  while the stock transfer books for such stock or  for  the
Series  E Stock are duly closed for any purpose, but certificates
for  shares of Common Stock shall be issued and delivered as soon
as practicable after the opening of such books.

      2E.  Converted Shares and Common Stock Held for Conversion.
Any  shares  of  Series  E Stock which  at  any  time  have  been
converted  shall  be canceled, may not be reissued  as  Series  E
Stock,  and  shall  be returned to the status of  authorized  and
unissued  shares  of Preferred Stock without  designation  as  to
series.   The  Corporation shall at all times  reserve  and  keep
available  out  of its authorized but unissued shares  of  Common
Stock,  for the purpose of issuance upon conversion of shares  of
Series  E  Stock  then  outstanding and  shall  take  all  action
necessary  so  that  shares of Common Stock  so  issued  will  be
validly issued, fully paid and nonassessable.

      2F.  Taxes.  The Corporation will pay any and all stamp  or
similar  taxes that may be payable in respect of the issuance  or
delivery  of  shares of Common Stock on conversion of  shares  of
Series  E Stock.  The Corporation shall not, however, be required
to  pay  any tax which may be payable in respect of any  transfer
involved  in the issuance and delivery of shares of Common  Stock
in  a  name other than that in which the shares of Series E Stock
so  converted were registered, and no such issuance  or  delivery
shall  be  made  unless  and  until the  person  requesting  such
issuance  has paid to the Corporation the amount of any such  tax
or  has  established to the satisfaction of the Corporation  that
such tax has been paid.

Part 3.  Dividends.

      If  the Corporation pays a dividend or makes a distribution
to  the holders of its Common Stock of any securities (other than
capital  stock for which an adjustment in the Conversion Rate  is
made  pursuant  to  Part  2C  of  this  Section  V)  or  property
(including  cash  or  securities  of  other  companies)  of   the
Corporation, or any rights, options or warrants to subscribe  for
or purchase securities or property (including securities of other
companies)  of  the  Corporation, then, simultaneously  with  the
payment  of such dividend or the making of such distribution  the
Corporation  will pay or distribute to the holders of  record  of
the  Series  E  Stock  an amount of property (including,  without
limitation,   cash)   and/or   securities   (including,   without
limitation, securities of other companies) of the Corporation  as
would have been received by such holders had they exercised their
conversion  rights and converted such shares of  Series  E  Stock
into  Common Stock immediately prior to the record date used  for
determining stockholders of the Corporation entitled  to  receive
such  dividend  or distribution.  The dividend  payable  on  each
share  of  Series  E  Stock outstanding on the  record  date  for
determining  those  persons entitled to  receive  a  dividend  on
Common  Stock (or on the date the dividend is paid if  no  record
date  is set), shall be equal to the product of the dividend  per
share of Common Stock multiplied by the Conversion Rate in effect
on  such record date (or on the date the dividend is paid  if  no
record  date  is  set)  after  giving  taking  into  account  all
adjustments  to such Conversion Rates required to be  made  under
Part  2  of this Section V, above, as of such record date (or  on
the  date  the dividend is paid if no record date  is  set).   No
dividends  shall  be  paid  on the  Series  E  Stock  unless  all
dividends on the Senior Securities have been paid or reserved  in
accordance with the terms thereof.

Part 4.  Voting Rights.

      Each  share  of Series E Stock shall have no voting  rights
with  respect to any matter submitted to the stockholders of  the
Corporation,  except  to  the extent  required  by  the  Delaware
Revised Statutes and except the right to approve by majority vote
of  the  holders  of  the  Series E  Stock,  (i)  any  amendment,
modification  or repeal of the articles of incorporation  of  the
Corporation if the powers, preferences or special rights  of  the
Series  E  Stock  would  be  adversely  affected,  and  (ii)  the
imposition  of any restriction on the Series E Stock, other  than
restrictions  arising under the articles of incorporation  as  in
effect   at  June  1,  1996;  provided,  that  no  voting   right
attributable to the Series E Stock shall impose, or be  construed
to  impose,  any  limitation on the power of the  Corporation  to
create, authorize or issue, without the vote or approval  of  the
Series E Stock, shares of any class or series of Preferred  Stock
with rights, powers, privileges and preferences superior or equal
to the Series E Stock.

Part 5.  Definitions Applicable to Section V.

      "Business  Day"  shall mean a day other  than  a  Saturday,
Sunday  or  other day on which commercial banks in New York,  New
York, are authorized by law to close.

     "Common Stock" means the Common Stock, $0.0001 par value per
share,  of the Corporation and any capital stock of any class  of
the  Corporation hereafter authorized which is not limited  to  a
fixed sum or percentage of par or stated value in respect to  the
rights of the holders thereof to participate in dividends  or  in
the distribution or assets upon any liquidation, dissolution,  or
winding up of the Corporation.

      "Junior  Securities" means any of the Corporation's  equity
securities other than Senior Securities and the Series E Stock.

      "Liquidation  Value"  of  any Series  E  Stock  as  of  any
particular date will be equal to $0.02 per share.

      "Person" means an individual, a partnership, a corporation,
an  association, a joint stock company, a trust, a joint venture,
an  unincorporated organization and a governmental entity or  any
department, agency or political subdivision thereof.

       "Senior  Securities"  means  the  Corporation's  Series  A
Convertible  Preferred  Stock,  Series  B  Convertible  Preferred
Stock,  Series  C  8% Convertible Preferred Stock,  Series  D  8%
Convertible  Preferred Stock, and any other class  or  series  of
Preferred  Stock hereafter created, authorized, and  issued  with
rights,  powers, privileges and preferences superior or equal  to
the Series E Stock.

                *               *               *

           IN  WITNESS  WHEREOF, the Corporation has caused  this
certificate  to  be executed by Barry S. Roseman, its  President,
and  attested to by Philicia Levinson, its Secretary,  this  18th
day of October, 1996.

                              HEADWAY CORPORATE SERVICES, INC.

                              By  Barry S. Roseman, President
                                     (Signature)

ATTEST

By  Philicia Levinson, Secretary
       (Signature)