EXHIBIT A

                                 DESCRIPTION OF
                CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES A


         Capitol Communities  Corporation,  a Nevada corporation (the "Company")
is offering up to 7,500,000  shares of Cumulative  Convertible  Preferred Stock,
Series A (the "Series A Preferred Stock"), for maximum amount of $7,500,000. The
Company's  Articles  of  Incorporation  authorize  the  Company  to  issue up to
10,000,000  shares of Preferred  Stock at a par value of $.01 per share. To date
the Company has no outstanding and issued shares of Preferred  Stock.  The Board
of  Directors of the Company has  authorized  the issuance of Series A Preferred
Stock on the terms and conditions set forth below.

         The  Series A  Preferred  Stock will be offered at a price of $1.00 per
share. The Series A Preferred Stock is subject to a minimum offering requirement
of not less than holders of 70% of the total  promissory  note debt  outstanding
electing to convert debt into Series A Preferred Stock.

         A.  DIVIDENDS.  Holders of Series A Preferred Stock will be entitled to
receive dividends, when and as declared by the Board of Directors, at the annual
rate of five and one quarter  percent (5.25%) per share per annum, to the extent
funds are legally available therefor.

         Upon  issuance  of the Series A  Preferred  Stock,  shareholders  shall
receive a prepaid dividend of 5.25% in cash for the period April 1, 2002 through
March 31, 2003.  Thereafter,  future dividends are payable  quarterly on October
30, and April 30 of each year (each  constituting  a "Dividend  Payment  Date"),
commencing  April 1, 2003, with the first dividend payment due October 30, 2003,
except that if any such date is a Saturday,  Sunday or legal holiday,  then such
dividend  shall be  payable  on the next day that is not a  Saturday,  Sunday or
legal  holiday.  Dividends  will accrue and be cumulative and will be payable to
holders  of record as they  appear on the  stock  books of the  Company  on such
record  dates  as are  fixed  by the  Board of  Directors.  Notwithstanding  the
foregoing,  no dividends may be declared or paid on the Series A Preferred Stock
if the declaration or payment of such dividends  would violate,  or constitute a
breach or default under,  any present or future  agreement for money borrowed to
which the Company is a party or by which it is bound.

         The amount of dividends  payable per Series A Preferred  Stock for each
semi-annual  dividend  period will be computed by dividing  the annual  dividend
amount by two. The amount of dividends  payable for the initial  dividend period
and any period shorter than a full dividend period will be computed on the basis
of a 360-day  year.  No  interest  will be payable  in  respect of any  dividend
payment on the Series A Preferred Stock which may be in arrears.


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         B.  RANKING.  The  Series A  Preferred  Stock  will be on  parity as to
dividends  with any other  series of  preferred  stock  hereafter  issued by the
Company.  The Series A Preferred  Stock will have priority as to dividends  over
the Common  Stock.  The Company may not pay  dividends on any class or series of
the  Company's  stock  having  parity  with the Series A  Preferred  Stock as to
dividends,  if any such stock is hereafter issued, (the "Parity Dividend Stock")
unless it has paid or declared and set apart for payment,  or  contemporaneously
pays or declares  and sets apart for payment,  all accrued and unpaid  dividends
for all prior periods on the Series A Preferred  Stock;  and the Company may not
pay dividends on the Series A Preferred Stock unless it has paid or declared and
set apart for payment or  contemporaneously  pays or declares and sets apart for
payment,  all accrued and unpaid  dividends  for all prior periods on the Parity
Dividend  Stock.  Whenever  all  accrued  dividends  are not paid in full on the
Series A Preferred Stock or any Parity Dividend Stock, all dividends declared on
the Series A Preferred  Stock and such Parity Dividend Stock will be declared or
made pro rata so that the amount of  dividends  declared  per Series A Preferred
Stock and such parity  dividend  stock will bear the same ratio that accrued and
unpaid  dividends per Series A Preferred  Stock and such Parity  Dividend  Stock
bear to each other.

         The  holders  of  Series A  Preferred  Stock  are not  entitled  to any
additional  dividends beyond the cumulative  dividends specified in this Section
B.

         C. VOTING RIGHTS. The holders of the Series A Preferred Stock will have
no voting rights except as required by Nevada law. In exercising  any such vote,
each outstanding Series A Preferred Stock will be entitled to one vote.

         D.  OPTIONAL  REDEMPTION.  The  Series  A  Preferred  Stock  may not be
redeemed  prior to 90 days from the date of  issuance.  Thereafter  the Series A
Preferred  Shares are redeemable for cash, in whole or in part, at the option of
the Company,  at $1.00 per share plus all accrued and unpaid dividends,  whether
or not  declared,  up to an  including  the date of  redemption  (the  "Series A
Redemption Price");  provided that no amounts may be set aside or applied to the
redemption  or  purchase  of any Series A  Preferred  Stock at any time when the
terms and  provisions of any agreement to which the Company is a party  relating
to an  indebtedness  of  money  the  Company  has  borrowed  which  specifically
prohibits  or limits such action,  or such action  would  constitute a breach or
default  thereunder.  In  addition,  in the event the  Company has failed to pay
accrued  dividends on the Series A Preferred Stock, it may not redeem any of the
outstanding shares of Series A Preferred Stock until all such accrued and unpaid
dividends  and (except with  respect to shares to be redeemed)  the then current
quarterly dividends have been paid in full.

         If fewer than all of the outstanding Series A Preferred Stock are to be
redeemed, the Company will select those Series A Preferred shares to be redeemed
pro rata or by lot or in such manner as the Board of  Directors  may  determine.
Notice of redemption will be mailed at least  thirty-five (35) but not more than
sixty (60) days before the redemption  date to each holder of record of Series A
Preferred  Stock to be  redeemed  at the  holder's  address  shown on the  stock
transfer  books of the Company.  After the redemption  date,  unless there shall


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have been a default in payment of the redemption price,  dividends will cease to
accrue on the Series A Preferred  Stock called for  redemption and all rights of
the  holders of such  shares  will  terminate,  except the right to receive  the
redemption price without interest.

         E.  LIQUIDATION RIGHTS. In the event of any liquidation, dissolution or
winding up of the Company,  holders of Series A Preferred  Stock are entitled to
receive the liquidation  preference of $1.00 per share,  plus an amount equal to
any accrued and unpaid  dividends to the payment date,  and no more,  before any
payment or distribution  is made to the holders of Common Stock.  The holders of
Series A  Preferred  Stock  rank on parity  with all  series or  classes  of the
Company's  preferred  stock  hereafter  issued  that  rank  on a  parity  as  to
liquidation  rights with the Series A Preferred  Stock and are entitled to share
ratably in accordance with the respective  preferential  amounts payable on such
stock, in any distribution  (after payment of the liquidation  preference of the
senior  liquidation  stock) which is not sufficient to pay in full the aggregate
of the amounts payable thereon.

         After  payment in full of the  liquidation  preference  of the Series A
Preferred  Stock, the holders of such shares will not be entitled to any further
participation  in any  distribution  of the  assets  by the  Company.  Neither a
consolidation,  merger or other business combination of the Company with or into
another corporation or other entity nor a sale or transfer of all or part of the
Company's  assets for cash,  securities  or other  property will be considered a
liquidation, dissolution or winding up of the Company.

         F. MANDATORY REDEMPTION. Commencing sixty (60) days after issuance, but
not  sooner  than  August  15,  2002,  and for as long  as any of the  Series  A
Preferred  Stock is  outstanding,  the Company  shall have the option to require
mandatory  conversion of the Series A Preferred  Stock for the Company's  Common
Stock. Each Series A Preferred Stock shall automatically  convert into one share
of Common  Stock for each share of Series A  Preferred  Share held by  Investor,
predicated upon certain events ("Triggered  Events").  The Triggered Event shall
occur,  when and if, the Company's  stock,  based on the average of the high and
low prices of the Common  Shares for a  consecutive  period of ten (10)  trading
days, as reported by the National  Quotation Bureau,  Inc. ("NQB"),  and reflect
inter-dealer prices as reported on the NASDAQ electronic bulletin board, reaches
a price of $1.50 per share of Common Stock.

         G.  REGISTRATION  RIGHTS.  If the Company  elects to require  mandatory
conversion, it
shall use its best effort to register  under the  Securities  Act of 1933,  such
common stock shares for resale within 180 days from the date of  conversion,  or
as  soon  as   practicable,   use  its  diligent  best  efforts  to  effect  all
registration,  qualification, and compliance (including, without limitation, the
execution  of an  undertaking  to file  post-effective  amendments,  appropriate
compliance  with  regulations  issued  under  the  Securities  Act and any other
governmental  requirements or regulations) that is requested, and will permit or
facilitate the sale and distribution of the registrable securities.


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         H.  CONVERSION.  The holder of any Series A Preferred  Stock will  have
the right, at the holder's option, to convert any or all such shares into Common
Stock (the  "Conversion  Shares"),  at any time after 90 days from the  issuance
date of the Series A Preferred  Stock (the  "Purchase  Date");  except for those
shares of Series A Preferred  Stock that have been called for  redemption.  Such
conversion  rights will  terminate  at the close of business on the business day
called for redemption  (unless the Company defaults in the payment of the Series
A redemption price).  Each share of Series A Preferred Stock is convertible into
Common Stock pursuant to the following terms and conditions:

         (1)  Conversion  Right.   Subject  to  and  upon  compliance  with  the
provisions  of this  Section H, and to the  Mandatory  Redemption  Rights of the
Company  pursuant  to Section F, the holder of any shares of Series A  Preferred
Stock may at such holder's  option,  at any time after 90 days from the Purchase
Date, or from time to time thereafter, convert at a price of $1.00 per share any
or all such shares into fully paid and non-assessable  shares of Common Stock at
the  following  rate:  One (l)  share  of  Series  A  Preferred  Stock  shall be
convertible into one (1) share of Common Stock (the "Conversion Rate").

         (2) Dividend Upon  Conversion or  Redemption.  No payment or adjustment
shall be made by the Company to any holder of shares of Series A Preferred Stock
surrendered  for conversion or redemption in respect of dividends  accrued since
the last  preceding  Dividend  Payment  Date on the shares of Series A Preferred
Stock surrendered for conversion;  provided however that if shares of the Series
A Preferred  Stock shall be converted or redeemed  subsequent to any record date
with respect to any Dividend  Payment Date and prior to the next such succeeding
Dividend  Payment Date, the dividend  falling due on such Dividend  Payment Date
shall be payable on such Dividend Payment Date  notwithstanding  such conversion
or  redemption,  and  such  dividend  (whether  or not  punctually  paid or duly
provided  for)  shall  be paid to the  person  in whose  name  such  shares  are
registered at the close of business on such record date.

         (3) Method of Conversion.

                  (i) The  surrender  of any shares of Series A Preferred  Stock
for conversion shall be made by the holder thereof by delivering the certificate
or certificates  evidencing  ownership of such shares with proper endorsement or
instruments  of transfer to the Company at the office or agency to be maintained
by the Company for that  purpose,  and such holder shall give written  notice to
the  Company at said  office or agency  that he or she  elects to  convert  such
shares of Series A Preferred Stock in accordance with the provisions thereof and
of this  Section H . Such notice  shall also state the number of whole shares of
Series A  Preferred  Stock and the name or names (with  addresses)  in which the
certificate or certificates  evidencing ownership of Common Stock which shall be
issuable on such  conversion  shall be issued.  In the case of lost or destroyed
certificates  evidencing  ownership of shares of Series A Preferred  Stock to be
surrendered for conversion, the holder shall submit proof of loss or destruction
and such indemnity as shall be required by the Company.


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                  (ii) Subject to the  provisions of paragraph (6) below of this
Section H, every such notice of election to convert shall  constitute a contract
between the holder of such shares of Series A Preferred  Stock and the  Company,
whereby such holder  shall be deemed to  subscribe  for the amount of the Common
Stock which he will be entitled to receive upon such  conversion and, in payment
and  satisfaction  of such  subscription,  to surrender  such shares of Series A
Preferred Stock and to release the Company from all obligations thereon (subject
to the payment of accrued  dividends in  accordance  with  paragraph (2) of this
Section H above),  and  whereby  the  Company  shall be deemed to agree that the
surrender of such shares of Series A Preferred Stock and the  extinguishment  of
its obligation thereon (except as aforesaid),  shall constitute full payment for
the Common Stock so subscribed for and to be issued upon such conversion.

                  (iii) As soon as practicable  after its receipt of such notice
and the  certificate  or  certificates  evidencing  ownership  of such shares of
Series A  Preferred  Stock,  the Company  shall issue and shall  deliver at said
office  or agency  to the  person  for  whose  account  such  shares of Series A
Preferred  Stock  were  so  surrendered,  or on  his  or her  written  order,  a
certificate or  certificates  for the number of such shares of Common Stock into
which the Series A Preferred Stock surrendered is to be converted and a check or
cash  payment  (if any) to  which  such  holder  is  entitled  with  respect  to
fractional shares as determined by the Company, in accordance with paragraph (5)
below of this Section H, at the close of business on the date of conversion.

                  (iv) Such conversion  shall be deemed to have been effected on
the  date  on  which  the  Company  shall  have  received  such  notice  and the
certificate or certificates for such shares of Series A Preferred Stock; and the
person or persons in whose name or names any  certificate  or  certificates  for
Common  Stock shall be  issuable  upon such  conversion  shall be deemed to have
become on said date the holder or  holders  of record of the shares  represented
thereby;  provided that any such  surrender on any date when the stock  transfer
books of the Company shall be closed shall become  effective for all purposes on
the next  succeeding  day on which such stock  transfer books are open, but such
conversion shall be at the Conversion Rate in effect on the date upon which such
surrender occurs.

         (4) Adjustment to Conversion Rate. The Conversion Rate shall be subject
to adjustments from time to time as follows:

                  (i) In case the Company  shall at any time shall (I) declare a
dividend on the Common Stock in shares of its capital stock,  (II) subdivide its
outstanding  Common  Stock,  (III) combine the  outstanding  Common Stock into a
smaller number of shares,  (IV) any  reclassification  including stock splits or
reverse  stock  splits,  or (V)  issue  any  shares  of  its  capital  stock  by
reclassification  of the Common Stock  (including any such  reclassification  in
connection with a consolidation  or merger in which the Company is the surviving
corporation), the Conversion Rate in effect on the record date for such dividend
or on the effective date of such  subdivision,  combination or  reclassification
shall be  proportionately  adjusted so that the holder of any Series A Preferred
Stock  converted  after such time shall be  entitled  to receive  the  aggregate


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number  and kind of shares  which,  if such  Series A  Preferred  Stock had been
converted  immediately prior to such time, the holder would have owned upon such
conversion and been entitled to receive by virtue of such dividend, subdivision,
combination or  reclassification.  Such  adjustment  shall be made  successively
whenever any event listed above shall occur.

                  (ii) In case the Company shall issue rights or warrants to all
holders of its Common  Stock (which  rights or warrants are not  available on an
equivalent  basis to  holders  of the Series A  Preferred  Stock on  conversion)
entitling them to subscribe for or purchase Common Stock, the Conversion Rate in
effect on the  record  date for such  issuance  of rights or  warrants  shall be
proportionately  adjusted (subject to the limitations  contained in subparagraph
(iv) of this  paragraph  4,  Section  H) so that  the  holders  of any  Series A
Preferred  Stock  converted  after such time shall be  entitled  to receive  the
aggregate  number and kind of shares which, if such Series A Preferred Stock had
been  converted  immediately  prior such time,  the holder would have owned upon
such  conversion  and been  entitled  to receive by virtue of such  issuance  of
rights or  warrant.  Such  adjustment  shall  become  effective  at the close of
business on such record  date;  however,  to the extent that Common Stock is not
delivered  after the expiration of such rights or warrants,  the Conversion Rate
shall be readjusted (but only with respect to Series A Preferred Stock converted
at such expiration) to the Conversion Rate which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made upon the
basis of delivery of only the number of shares of Common Stock actually issued.

                  (iii) In case the Company  shall  distribute to all holders of
Common  Stock  (including  any  such  distribution  made  in  connection  with a
consolidation  or merger  in which the  Company  is the  surviving  corporation)
evidences of its indebtedness or assets (including securities but excluding cash
dividends or distributions  paid out of retained  earnings and dividends payable
in Common Stock) or subscription rights or warrants (excluding those referred to
in  subparagraph  (ii) of this paragraph (4) and Section H), the Conversion Rate
shall be  proportionately  adjusted  (subject to the  limitations  contained  in
subparagraph  (iv) of this  paragraph  (4)) so that the  holder of any  Series A
Preferred  Stock  converted  after such time shall be  entitled  to receive  the
aggregate  number and kind of shares which, if such Series A Preferred Stock had
been converted  immediately prior to such time, the holder would have owned upon
such  conversion  and been  entitled to receive by virtue of such  distribution.
Such adjustment  shall become  effective at the close of business on such record
date.

                  (iv) In the case of any  consolidation of the Company with, or
merger of the Company into, any other entity,  any merger of another entity into
the Company (other than a merger which does not result in any  reclassification,
conversion,  exchange or cancellation  of outstanding  shares of Common Stock of
the Company),  any sale or transfer of all or substantially all of the assets of
the  Company,  or any  compulsory  share  exchange  whereby the Common  Stock is
converted into other securities,  cash or other property, each holder of a share
of Series A Preferred Stock then outstanding  shall have the right thereafter to
convert such share only into the kind and amount of  securities,  cash and other
property  receivable  upon  such  consolidation,   merger,   sale,  transfer  or


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compulsory  exchange by a holder of the number of shares of Common  Stock of the
Company  into  which such  shares of Series A  Preferred  Stock  might have been
converted  immediately prior to such  consolidation,  merger,  sale, transfer or
compulsory  exchange  assuming such holder of Common Stock of the Company is not
an entity with which the Company  consolidated  or into which the Company merged
or which merged into the Company or to which such sale or transfer was made,  as
the case may be ("Constituent Entity"), or an affiliate of a Constituent Entity,
and assuming such holder  failed to exercise his rights of election,  if any, as
to the kind or amount of  securities,  cash and other property  receivable  upon
such consolidation, merger, sale, transfer or compulsory exchange (provided that
if the kind or amount of  securities,  cash and other property  receivable  upon
such  consolidation,  merger,  sale,  transfer or compulsory exchange is not the
same for each share of Common  Stock of the Company  held  immediately  prior to
such consolidation,  merger, sale, transfer or compulsory exchange by other than
a Constituent  Entity or an affiliate thereof in respect of which such rights of
election  shall not have been  exercised  ("Non-Electing  Share"),  then for the
purpose of this  subparagraph  (iv) the kind and amount of securities,  cash and
other property  receivable upon such  consolidation,  merger,  sale, transfer or
compulsory  exchange by each  Non-Electing  Share shall be deemed to be the kind
and amount so receivable per share by a plurality of the  Non-Electing  Shares).
If necessary,  appropriate  adjustment  shall be made in the  application of the
provisions set forth herein with respect to the rights and interests  thereafter
of the  holders  of  shares  of Series A  Preferred  Stock,  to the end that the
provisions set forth herein shall thereafter correspondingly be made applicable,
as nearly as may  reasonably  be, in  relation  to any  shares of stock or other
securities or property  thereafter  deliverable on the conversion of the shares.
The  above  provisions  shall  similarly  apply  to  successive  consolidations,
mergers, sales, transfers or compulsory exchanges.  The Company shall not effect
any such  consolidation,  merger or sale unless prior to or simultaneously  with
the consummation  thereof the successor  corporation (if other than the Company)
resulting from such  consolidation or merger or the corporation  purchasing such
assets or other  appropriate  corporation  or entity  shall  assume,  by written
instrument,  the obligation to deliver to the holder of each share of the Series
A Preferred  Stock such shares of stock,  securities or assets as, in accordance
with the foregoing provisions, such holder may be entitled to receive under this
paragraph (4) of Section H.

                  (v) The Company may make such  adjustments  in the  Conversion
Rate, in addition to those  required by  subparagraphs  (i) through (iv) of this
paragraph  (4) of Section H, as it  considers  to be advisable in order that any
event  treated for Federal  income tax  purposes as a dividend of stock or stock
rights shall not be taxable to the recipients.

         (5)  Fractional  Shares.  No fractional  shares or script  representing
fractional  shares shall be issued upon the conversion of any shares of Series A
Preferred  Stock, but the holder thereof will receive in cash an amount equal to
the value of the book  value of the  Common  Stock on the fifth day prior to the
date of conversion as determined  by the Company's  appointed  certified  public
accountant.  If more  than  one  share  of  Series A  Preferred  Stock  shall be
surrendered  for  conversion at one time by the same holder,  the number of full


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shares  issuable upon  conversion  thereof shall be computed on the basis of the
aggregate number of such shares so surrendered.

         (6) Payment of Taxes.  The Company  shall pay any tax in respect of the
issue of stock certificates on conversion of shares of Series A Preferred Stock.
The Company shall not, however,  be required to pay any tax which may be payable
in respect of any  transfer  involved in the issue and  delivery of stock in any
name  other than that of the holder of the  shares  converted,  and the  Company
shall not be required to issue or deliver any such stock certificate  unless and
until the person or persons  requesting the issuance  hereof shall have paid the
Company the amount of any such tax or shall have established to the satisfaction
of the Company that such tax has been paid.

         (7) Common Stock  Reserved  for  Conversion.  The Company  shall at all
times reserve and keep available out of its authorized and unissued Common Stock
or have  available  in its  treasury  the full number of shares of Common  Stock
deliverable upon the conversion of all outstanding  shares of Series A Preferred
Stock and shall  take all such  action as may be  required  from time to time in
order that it may  validity  and  legally  issue  fully paid and  non-assessable
shares of Common Stock upon conversion of the Series A Preferred Stock.

         (8) Notice. In the event:

                  (i) the  Company  shall  declare  a  dividend  (or  any  other
distribution)  on its Common  Stock (other than a cash  dividend  payable out of
retained earnings); or

                  (ii) the Company  shall  authorize  the issuance to holders of
its Common  Stock of rights or warrants  to  subscribe  for or  purchase  Common
Stock; or

                  (iii)  of any  reclassification  of the  Common  Stock  of the
Company  (other than a subdivision  or  combination  of its  outstanding  Common
Stock,  or a change in par value,  or from par value to no par value, or from no
par value to par value) or of any  consolidation  or merger to which the Company
is a party or of the sale or transfer of all or substantially  all of the assets
of the  Company  or  compulsory  share  exchange  whereby  the  Common  Stock is
converted into other securities,  cash or property and for which approval of any
stockholders of the Company is required; or

                  (iv) of the voluntary or involuntary dissolution,  liquidation
or winding up of the Company;  then, and in each event,  the Company shall cause
to be mailed to each holder of Series A Preferred  Stock,  at his or her address
as the same shall appear on the stock  transfer books of the Company as promptly
as possible  but in any event at least  fifteen  (15) days prior the  applicable
date hereinafter  specified,  a notice stating (I) the date on which a record is
to be taken for the purpose of such dividend, distribution,  rights or warranty,
or, if a record is not to be taken,  the date as of which the  holders of Common
Stock of record to be entitled to such dividend,  distribution  or rights are to
be determined, and the nature and amount of such dividend, distribution,  rights


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or  warrants  or (II) the date on which  such  reclassification,  consolidation,
merger,  sale, transfer,  dissolution,  liquidation or winding up is expected to
become effective.

         (9) "Common Stock".  For the purposes of this Section H, "Common Stock"
shall  mean  stock  of  the  Company  of any  class,  whether  now or  hereafter
authorized,  which has the right to  participate in the  distribution  of either
earnings or assets of the Company  without limit as to the amount or percentage,
including  without  limitation,  the  Common  Stock.  In case by  reason  of the
operation  of  paragraph  (4) of this Section H the shares of Series A Preferred
Stock shall be convertible into any other shares of stock or other securities or
property of the Company or of any other corporation, any reference herein to the
conversion of shares of Series A Preferred  Stock pursuant to Section H shall be
deemed to refer to and  include the  conversion  of shares of Series A Preferred
Stock into such other shares of stock or other securities or property.