<PAGE>
 
                                                                    Exhibit 3(b)

                                AMENDMENT NO. 1

                                       TO

                         CERTIFICATE OF DESIGNATIONS OF

                            SERIES C PREFERRED STOCK

                                       OF

                       CHOICES ENTERTAINMENT CORPORATION

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware


     CHOICES ENTERTAINMENT CORPORATION, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
hereby certifies that, pursuant to (i) the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, (ii) the
provisions of Section 151 of said General Corporation Law, and (iii) the
resolutions adopted by the Board of Directors of the Corporation by unanimous
written consent dated August 11, 1995, the Board of Directors duly adopted
resolutions providing for the amendment of the Certificate of Designations of
Series C Preferred Stock of the Corporation to increase from 300 to 500 the
number of shares designated for issuance as Series C Preferred Stock (none of
which have been issued to date), and increasing from 25,000 to 40,000 the number
of votes to which each share of Series C Preferred Stock is entitled and the
number of shares of Common Stock into which each share of Series C Preferred
Stock may become convertible (and making similar conforming changes), which
resolutions are as follows:

               RESOLVED, that pursuant to the authority vested in the Board of
     Directors of the Corporation by the Certificate of Incorporation, the Board
     of Directors does hereby approve the issuance up to 500 shares of Preferred
     Stock, par value $.01 per share, of the Corporation, to be designated
     "Series C Preferred Stock" of the presently authorized shares of Preferred
     Stock.  The voting powers, designations, preferences, and other rights of
     the Series C Preferred Stock authorized hereunder and the qualifications,
     limitations and restrictions of such preferences and rights are as follows:

               1.  Cash Dividends.  Cash dividends shall be paid with respect to
                   --------------                                               
     the shares of Series C Preferred Stock on the same basis as dividends are
     paid to holders of common stock of the Corporation (the "Common Stock"),
     and shall be distributed ratably to holders of the Series C Preferred Stock
     and holders of Common Stock on the basis that each 1/40,000 share of Series
     C Preferred Stock shall be pro rata with each whole share of Common Stock.
<PAGE>
 
               2.  Voting.  The holders of Series C Preferred Stock shall be
                   ------                                                   
     entitled to vote on any matter required to be or otherwise submitted to a
     vote of stockholders of the Corporation together with the Common Stock and
     not as a separate class, unless otherwise required by law.  Each share of
     Series C Preferred Stock shall be entitled to 40,000 votes.

               3.  Conversion.  The Series C Preferred Stock shall not be
                   ----------                                            
     convertible when issued, but shall automatically become convertible into
     shares of Common Stock (at the rate of 40,000 shares of Common Stock for
     every one share of Series C Preferred Stock (the "Conversion Rate")) upon
     the filing of an amendment to the Corporation's Certificate of
     Incorporation (the "Amendment") which increases the number of authorized
     shares of Common Stock by a number equal to or greater than the sum of (i)
     40,000 multiplied by the number of then outstanding shares of Series C
     Preferred Stock, plus (ii) that number of additional shares of Common
     Stock, if any, needed to be reserved for issuance upon the conversion or
     exercise of all other then outstanding convertible or exercisable
     securities of the Corporation.  Upon filing of the Amendment, the number of
     shares approved for issuance as Series C Preferred Stock shall
     automatically be decreased from 500 to a number equaling the number of then
     outstanding shares of Series C Preferred Stock (thus preventing the
     issuance of any additional shares of Series C Preferred Stock).  The
     following provisions shall apply after the Series C Preferred Stock becomes
     convertible:

               (a) Any holder of shares of Series C Preferred Stock electing to
     convert such shares into Common Stock shall surrender the certificate or
     certificates for such shares at the office of the Corporation (or at such
     other place as the Corporation may designate by notice to the holders of
     shares of Series C Preferred Stock) during regular business hours, duly
     endorsed to the Corporation or in blank, or accompanied by instruments of
     transfer to the Corporation in blank, in form satisfactory to the
     Corporation and shall give written notice to the Corporation at such office
     that such holder elects to convert such shares of Series C Preferred Stock.
     The Corporation shall, as soon as practicable after such deposit of
     certificates for shares of Series C Preferred Stock, accompanied by the
     written notice above prescribed, issue and deliver at such office to the
     holder for whose account such shares were surrendered, or to his nominee,
     certificates representing the number of shares of Common Stock to which
     such holder is entitled upon such conversion.

               (b) Conversion shall be deemed to have been made as of the date
     of surrender of certificates for the shares of Series C Preferred Stock to
     be converted and the delivery of written notice as hereinabove provided;
     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.

               (c) The Conversion Rate shall be adjusted from time to time as
     follows:

                                       2
<PAGE>
 
               i)  In case the Corporation shall (A) subdivide its outstanding
     shares of Common Stock, (B) combine its outstanding shares of Common Stock
     into a smaller number of shares or, (C) issue by reclassification of its
     shares of Common Stock any shares of capital stock of the Corporation, the
     conversion right and each Conversion Rate in effect immediately prior to
     such action shall be adjusted so that the holder of any shares of the
     Series C Preferred Stock thereafter surrendered for conversion shall be
     entitled to receive the number of shares of capital stock of the
     Corporation which such holder would have owned immediately following such
     action had such shares of the Series C Preferred Stock been converted
     immediately prior thereto.  An adjustment made pursuant to this
     subparagraph shall become effective retroactively immediately after the
     record date in the case of a dividend or distribution and shall become
     effective immediately after the effective date in the case of a
     subdivision, combination or reclassification.  If, as a result of an
     adjustment made pursuant to this subparagraph, the holder of any shares of
     the Series C Preferred Stock thereafter surrendered for conversion shall
     become entitled to receive shares of two or more classes of capital stock
     of the Corporation, the Board of Directors (whose determination shall be
     conclusive) shall determine the allocation of the adjusted Conversion Rate
     between or among shares of such classes of capital stock.

               ii)  Notwithstanding the foregoing, the Corporation shall not be
     required to make any adjustment of the Conversion Rate unless such
     adjustment would require an increase or decrease of at least 5% in such
     rate.  Any lesser adjustment shall be carried forward and shall be made at
     the time of and together with the next subsequent adjustment which,
     together with any adjustment or adjustments so carried forward, shall
     amount to an increase or decrease of at least 5% in such rate.

               iii)  Whenever an adjustment in the Conversion Rate is required,
     the Corporation shall forthwith place on file with its Secretary a
     statement signed by its Chairman of the Board, President or a Vice
     President and by its Secretary or Treasurer or one of its Assistant
     Secretaries or Assistant Treasurers, stating the adjusted Conversion Rate
     determined as provided herein.  Such statement shall set forth in
     reasonable detail such facts as shall be necessary to show the reason and
     the manner of computing such adjustment.  Promptly after the adjustment of
     the Conversion Rate, the Corporation shall mail a notice thereof to each
     holder of shares of Series C Preferred Stock.

               iv)  In case of either (A) any consolidation or merger to which
     the Corporation is a party, other than a merger or consolidation in which
     the Corporation is the surviving or continuing corporation and which does
     not result in any reclassification of, or change (other than a change in
     par value or from par value to no par value or from no par value to par
     value, or as a result of a subdivision or combination) in, outstanding
     shares of Common Stock, or (B) any sale or conveyance to another
     corporation of all or substantially all of the assets of the Corporation,
     then the Corporation, or such successor corporation, as the case may be,
     shall make appropriate provision so that the holder of each share of Series
     C Preferred Stock then outstanding 

                                       3
<PAGE>
 
     shall have the right to convert such shares of Series C Preferred Stock
     into the kind and amount of shares or other securities and property
     receivable upon such consolidation, merger, sale or conveyance by a holder
     of the number of shares of Common Stock into which such shares of Series C
     Preferred Stock might have been converted immediately prior to such
     consolidation, merger, sale or conveyance, subject to adjustments which
     shall be as nearly equivalent as may be practicable to the adjustments
     provided for hereunder. The provisions of this subparagraph shall apply
     similarly to successive consolidations, mergers, sales or conveyances.

               v)  The Corporation shall take all necessary action to cause any
     shares of Series C Preferred Stock which shall at any time have been
     converted to resume the status of authorized but unissued shares of
     Preferred Stock, without designation as to series, until such shares are
     once more designated as part of a particular series by the Board of
     Directors.  At the time when the Series C Preferred Stock first becomes
     convertible, and at all times thereafter, the Corporation shall reserve and
     keep available out of its authorized but unissued stock, for the purpose of
     effecting the conversion of the shares of the Series C Preferred Stock,
     such number of its duly authorized shares of Common Stock as shall from
     time to time be sufficient to effect the conversion of all outstanding
     shares of the Series C Preferred Stock; provided, however, that nothing
     contained herein shall preclude the Corporation from satisfying its
     obligations in respect of the conversion of the shares by delivery of
     purchased shares of Common Stock which are held in the treasury of the
     Corporation.

               vi)  The Corporation shall pay any and all issue or transfer
     taxes that may be payable in respect of any issuance or delivery of shares
     of Common Stock on conversion of shares of Series C Preferred Stock
     pursuant hereto.  The Corporation shall not, however, be required to pay
     any tax which is payable in respect of any transfer involved in the issue
     or delivery of Common Stock in a name other than that in which the shares
     of Series C Preferred Stock so converted were registered, and no such issue
     or delivery shall be made unless and until the person requesting such issue
     has paid to the Corporation the amount of such tax, or has established, to
     the satisfaction of the Corporation, that such tax has been paid.

               vii)  Before taking any action that would result in the effective
     price of the shares of Common Stock issuable upon conversion of Series C
     Preferred Stock being less than the then par value of the Common Stock, the
     Corporation shall take any corporate action which may, in the opinion of
     its counsel, be necessary in order that the Corporation may validly and
     legally issue fully paid and nonassessable shares of Common Stock.

               4.  Fractional Shares.  The Series C Preferred Stock may be
                   -----------------                                      
     issued as fractional shares in increments of 1/40,000 of a share.  Each
     fractional share of Series C Preferred Stock shall be entitled to the same
     rights and powers on a pro rata basis as a whole share of Series C
     Preferred Stock.

                                       4
<PAGE>
 
               5.  Liquidation, Dissolution, Winding Up.  The Series C Preferred
                   ------------------------------------                         
     Stock shall have no liquidation or other preference over the Corporation's
     Common Stock.  Upon the voluntary or involuntary liquidation, dissolution
     or winding up of the Corporation, its net assets shall be distributed
     ratably to holders of the Series C Preferred Stock and holders of Common
     Stock on the basis that each 1/40,000 share of Series C Preferred Stock
     shall be pro rata with each whole share of Common Stock.


     IN WITNESS WHEREOF, CHOICES ENTERTAINMENT CORPORATION, has caused this
Certificate to be signed by ______________, its ____________, and attested by
______________, its Secretary, this ___ day of ____________, 1995.

                                 CHOICES ENTERTAINMENT CORPORATION



                    By: /s/ Ronald W. Martignoni
                        ------------------------
                        Ronald W. Martignoni, CFO


ATTEST:



By:  ____________________________
     _________________, Secretary

                                       5