RATEXCHANGE CORPORATION

                           Certificate Of Designation
                     Of Series A Convertible Preferred Stock

         RateXchange  Corporation (the "Corporation"),  a corporation  organized
and existing under the provisions of the General Corporation Law of the State of
Delaware,  does hereby certify that the following  resolution was adopted by the
Board of Directors of the Corporation:

         RESOLVED,  that  pursuant  to the  authority  expressly  granted to and
vested in the Board of Directors of the  Corporation  (the "Board of Directors")
by the provisions of the Certificate of  Incorporation  of the Corporation  (the
"Certificate of Incorporation"),  there hereby is created,  out of the shares of
Preferred Stock,  par value $0.0001 per share, of the Corporation  authorized in
the  Certificate  of  Incorporation  (the  "Preferred  Stock"),  a series of the
Preferred  Stock  consisting  of 2,000,000  shares,  which series shall have the
following  powers,  designations,   preferences  and  relative,   participating,
optional  or other  rights and the  following  qualifications,  limitations  and
restrictions (in addition to the powers, designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations and
restrictions, set forth in the Certificate of Incorporation which are applicable
to the Preferred Stock):

         Section 1.  Designation and Amount.  The shares of such series shall be
designated  as "Series A Convertible  Preferred  Stock" (the "Series A Preferred
Stock") and the authorized  number of shares  constituting  such series shall be
2,000,000.  The par  value of the  Series A  Preferred  Stock  shall be [$o] per
share.

         Section  2.  Dividend  Provisions.  The  holders  of shares of Series A
Preferred Stock shall be entitled to receive  dividends of additional  shares of
Series A Preferred Stock at the rate of six percent (6%) per annum of the number
of shares of Series A Preferred  Stock then  outstanding.  Such dividends  shall
accrue and  accumulate  until  paid.  In  addition,  the holders of the Series A
Preferred Stock shall be given 15 days advance written notice of the record date
for  determining  holders of Common Stock entitled to receive a cash dividend to
be paid on such  Common  Stock,  so that the  holders of the Series A  Preferred
Stock may, if they choose,  elect to convert  their shares into shares of Common
Stock and thereby be eligible to receive such cash dividend.

         Section 3. Liquidation Preference.

                  (a) In the event of any liquidation, dissolution or winding up
of this  corporation,  either voluntary or involuntary,  the holders of Series A
Preferred  Stock shall be entitled to receive,  prior and in  preference  to any
distribution  of any of the assets of this  corporation to the holders of Common
Stock by reason of their ownership thereof, an amount per share equal to the sum
of (A) $2.75 for each outstanding share of Series A Preferred Stock


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(the  "Original  Series A Issue  Price") and (B) an amount equal to declared but
unpaid dividends on such share. If upon the occurrence of such event, the assets
and funds thus  distributed  among the holders of the Series A  Preferred  Stock
shall  be  insufficient  to  permit  the  payment  to such  holders  of the full
aforesaid  preferential  amounts,  then  the  entire  assets  and  funds of this
corporation  legally  available for  distribution  shall be distributed  ratably
among  the  holders  of the  Series  A  Preferred  Stock  in  proportion  to the
preferential amount each such holder is otherwise entitled to receive.

                  (b)  Upon  the  completion  of the  distribution  required  by
subparagraph  (a) of this Section 3, the  remaining  assets of this  corporation
available  for  distribution  to  stockholders  shall be  distributed  among the
holders  of Series A  Preferred  Stock and  Common  Stock pro rata  based on the
number of shares of Common Stock held by each  (assuming  conversion of all such
Series A Preferred Stock).

                      (i) For  purposes  of this  Section  3,  unless  otherwise
agreed by vote or by written consent by holders of at least sixty-seven  percent
(67%) of the then outstanding shares of Series A Preferred Stock, a liquidation,
dissolution or winding up of this  corporation  shall be deemed to be occasioned
by, or to include,  (A) the acquisition of this corporation by another entity by
means of any transaction or series of related transactions  (including,  without
limitation,  any  reorganization,  merger or consolidation)  that results in the
transfer of more than fifty  percent  (50%) of the  outstanding  voting power of
this  corporation;  or (B) a sale of all or  substantially  all of the assets of
this corporation.

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

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

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

                                  (2) If actively traded  over-the-counter,  the
              value shall be deemed to be the average of the closing bid or sale
              prices  (whichever is applicable)  over the thirty (30) day period
              ending three (3) days prior to the closing; and

                                  (3) If there is no active public  market,  the
              value  shall  be  the  fair  market  value  thereof,  as  mutually
              determined  by this  corporation  and


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              the holders of at least a majority of the voting power of all then
              outstanding shares of Preferred Stock.

                              (B) The method of valuation of securities  subject
         to investment letter or other restrictions on free marketability (other
         than restrictions arising solely by virtue of a stockholder's status as
         an  affiliate  or  former  affiliate)  shall be to make an  appropriate
         discount  from the market value  determined as above in (A) (1), (2) or
         (3) to reflect the approximate  fair market value thereof,  as mutually
         determined by this  corporation  and the holders of at least a majority
         of the voting power of all then  outstanding  shares of such  Preferred
         Stock.

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

                              (A) cause such closing to be postponed  until such
         time as the requirements of this Section 3 have been complied with; or

                              (B) cancel  such  transaction,  in which event the
         rights,  preferences  and  privileges  of the  holders  of the Series A
         Preferred  Stock  shall  revert  to and be the  same  as  such  rights,
         preferences and privileges  existing  immediately  prior to the date of
         the first notice referred to in subsection 3(b)(iv) hereof.

                      (iv) This corporation  shall give each holder of record of
Series A Preferred Stock written notice of such impending  transaction not later
than twenty (20) days prior to the stockholders'  meeting called to approve such
transaction,  if  any,  or  twenty  (20)  days  prior  to the  closing  of  such
transaction, whichever is earlier, and shall also notify such holders in writing
of the final  approval  of such  transaction.  The first of such  notices  shall
describe the material terms and conditions of the impending  transaction and the
provisions of this Section 3, and this  corporation  shall  thereafter give such
holders prompt notice of any material changes. The transaction shall in no event
take place  sooner than twenty  (20) days after this  corporation  has given the
first  notice  provided  for  herein or sooner  than ten (10)  days  after  this
corporation  has given  notice of any  material  changes  provided  for  herein;
provided,  however,  that such periods may be shortened upon the written consent
of the holders of  Preferred  Stock that are  entitled to such notice  rights or
similar notice rights and that represent at least a majority of the voting power
of all then outstanding shares of such Preferred Stock.

         Section 4. Redemption. The Series A Preferred Stock is not redeemable.

         Section 5.  Conversion.  The  holders of the Series A  Preferred  Stock
shall have conversion rights as follows (the "Conversion Rights"):

                  (a) Right to Convert.  Each share of Series A Preferred  Stock
shall be convertible, at the option of the holder thereof, at any time after the
date of  issuance  of such


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<PAGE>


share,  at the office of this  corporation or any transfer agent for such stock,
into such number of fully paid and  nonassessable  shares of Common  Stock as is
determined by dividing the Original Series A Issue Price by the Conversion Price
applicable  to such share,  determined as hereafter  provided,  in effect on the
date the certificate is surrendered for conversion. The initial Conversion Price
per share for shares of Series A Preferred  Stock shall be the Original Series A
Issue  Price;  provided,  however,  that the  Conversion  Price for the Series A
Preferred Stock shall be subject to adjustment as set forth in subsection  5(c).
In  addition,  each share of Series A  Preferred  Stock shall  automatically  be
converted  into shares of Common  Stock at the  Conversion  Price at the time in
effect for such  Series A  Preferred  Stock on the first date after which all of
the  following  conditions  are  satisfied:  (i) the fourth  anniversary  of the
Purchase  Date has  occurred;  (ii) the Common  Stock is publicly  traded on the
American Stock Exchange,  other national stock exchange,  or the NASDAQ National
Market on such date,  and (3) the closing price for the Common Stock has equaled
or  exceeded  $6.00  per  share  (as  adjusted  for any  stock  splits  or other
recapitalizations  after the date hereof) for the ten  consecutive  trading days
immediately prior to such date.

                  (b)  Mechanics  of  Conversion.  Before any holder of Series A
Preferred  Stock  shall be  entitled  to convert  the same into shares of Common
Stock, he or she shall surrender the certificate or certificates therefor,  duly
endorsed,  at the office of this  corporation  or of any transfer  agent for the
Series A Preferred  Stock,  and shall give written notice to this corporation at
its  principal  corporate  office of the  election to convert the same and shall
state therein the name or names in which the  certificate  or  certificates  for
shares of Common  Stock are to be issued.  This  corporation  shall,  as soon as
practicable  thereafter,  issue and  deliver  at such  office to such  holder of
Series A  Preferred  Stock,  or to the nominee or  nominees  of such  holder,  a
certificate  or  certificates  for the number of shares of Common Stock to which
such holder shall be entitled as aforesaid.  Such conversion  shall be deemed to
have been made  immediately  prior to the close of  business on the date of such
surrender  of the shares of Series A Preferred  Stock to be  converted,  and the
person or persons  entitled to receive the shares of Common Stock  issuable upon
such  conversion  shall be treated  for all  purposes  as the  record  holder or
holders of such shares of Common Stock as of such date. If the  conversion is in
connection with an underwritten  offering of securities  registered  pursuant to
the Securities Act of 1933, as amended, the conversion may, at the option of any
holder  tendering  Series A Preferred Stock for conversion,  be conditioned upon
the closing with the  underwriters  of the sale of  securities  pursuant to such
offering, in which event the person(s) entitled to receive the Common Stock upon
conversion of the Series A Preferred Stock shall not be deemed to have converted
such Series A Preferred  Stock  until  immediately  prior to the closing of such
sale of securities.

                  (c) Conversion  Price  Adjustments of Preferred  Stock for New
Issuance, Splits, Dividends and Combinations. The Conversion Price of the Series
A Preferred Stock shall be subject to adjustment from time to time as follows:

                           (i)


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                              (A) If this  corporation  shall  issue,  after the
         date upon  which any  shares of Series A  Preferred  Stock  were  first
         issued (the "Purchase  Date"),  any Additional Stock (as defined below)
         without  consideration  or for a consideration  per share less than the
         Conversion  Price for such  series in effect  immediately  prior to the
         issuance of such Additional Stock, the Conversion Price for such series
         in effect  immediately  prior to each  such  issuance  shall  forthwith
         (except as  otherwise  provided  in this  clause  (i)) be adjusted to a
         price  determined by multiplying  such Conversion  Price by a fraction,
         the  numerator  of which shall be the number of shares of Common  Stock
         outstanding  immediately  prior to such issuance  (including  shares of
         Common Stock deemed to be issued  pursuant to subsection  5(c)(i)(E)(1)
         or (2)) plus the number of shares of Common  Stock  that the  aggregate
         consideration  received by this  corporation  for such  issuance  would
         purchase at such Conversion  Price;  and the denominator of which shall
         be the number of shares of Common Stock  outstanding  immediately prior
         to such issuance  (including shares of Common Stock deemed to be issued
         pursuant to subsection  5(c)(i)(E)(1) or (2)) plus the number of shares
         of such Additional Stock.

                              (B) No adjustment of the Conversion  Price for the
         Series A Preferred  Stock shall be made in an amount less than one cent
         per share,  provided that any  adjustments  that are not required to be
         made by reason of this sentence  shall be carried  forward and shall be
         either taken into account in any  subsequent  adjustment  made prior to
         three  (3)  years  from  the  date  of the  event  giving  rise  to the
         adjustment being carried forward,  or shall be made at the end of three
         (3) years  from the date of the  event  giving  rise to the  adjustment
         being carried  forward.  Except to the limited  extent  provided for in
         subsections  (E)(3) and (E)(4),  no adjustment of such Conversion Price
         pursuant to this subsection 5(c)(i) shall have the effect of increasing
         the Conversion Price above the Conversion  Price in effect  immediately
         prior to such adjustment.

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

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

                              (E) In the case of the issuance  (whether  before,
         on or after the  applicable  Purchase  Date) of options to  purchase or
         rights  to  subscribe  for  Common  Stock,  securities  by their  terms
         convertible  into or  exchangeable  for  Common  Stock  or


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<PAGE>


         options to  purchase or rights to  subscribe  for such  convertible  or
         exchangeable  securities,  the following provisions shall apply for all
         purposes of this subsection 5(c)(i) and subsection 5(c)(ii).

                                  (1) The aggregate  maximum number of shares of
              Common Stock deliverable upon exercise  (assuming the satisfaction
              of any conditions to exercisability, including without limitation,
              the passage of time,  but without  taking into  account  potential
              antidilution adjustments) of such options to purchase or rights to
              subscribe  for Common Stock shall be deemed to have been issued at
              the  time  such   options  or  rights   were   issued  and  for  a
              consideration equal to the consideration (determined in the manner
              provided  in  subsections  5(c)(i)(C)  and  (c)(i)(D)),   if  any,
              received by the  corporation  upon the issuance of such options or
              rights plus the minimum exercise price provided in such options or
              rights  (without  taking  into  account   potential   antidilution
              adjustments) for the Common Stock covered thereby.

                                  (2) The aggregate  maximum number of shares of
              Common  Stock  deliverable  upon  conversion  of  or  in  exchange
              (assuming the satisfaction of any conditions to  convertibility or
              exchangeability,  including,  without  limitation,  the passage of
              time,  but without  taking  into  account  potential  antidilution
              adjustments) for any such  convertible or exchangeable  securities
              or upon the exercise of options to purchase or rights to subscribe
              for such  convertible  or  exchangeable  securities and subsequent
              conversion or exchange thereof shall be deemed to have been issued
              at the time such  securities were issued or such options or rights
              were issued and for a consideration equal to the consideration, if
              any,  received  by the  corporation  for any such  securities  and
              related options or rights  (excluding any cash received on account
              of  accrued  interest  or  accrued  dividends),  plus the  minimum
              additional   consideration,   if  any,   to  be  received  by  the
              corporation  (without taking into account  potential  antidilution
              adjustments) upon the conversion or exchange of such securities or
              the exercise of any related  options or rights (the  consideration
              in  each  case  to  be  determined  in  the  manner   provided  in
              subsections 5(c)(i)(C) and (c)(i)(D)).

                                  (3) In the event of any  change in the  number
              of shares  of Common  Stock  deliverable  or in the  consideration
              payable  to this  corporation  upon  exercise  of such  options or
              rights or upon  conversion of or in exchange for such  convertible
              or  exchangeable  securities,  including,  but not  limited  to, a
              change resulting from the antidilution  provisions thereof (unless
              such options or rights or convertible or  exchangeable  securities
              were merely deemed to be included in the numerator and denominator
              for purposes of  determining  the number of shares of Common Stock
              outstanding for purposes of subsection 5(c)(i)(A)), the Conversion
              Price of the Series A  Preferred  Stock,  to the extent in any way
              affected by or computed using such options,  rights or securities,


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<PAGE>


              shall  be  recomputed  to  reflect  such  change,  but no  further
              adjustment  shall be made for the actual  issuance of Common Stock
              or any payment of such consideration upon the exercise of any such
              options  or  rights  or  the   conversion   or  exchange  of  such
              securities.

                                  (4) Upon the expiration of any such options or
              rights,  the termination of any such rights to convert or exchange
              or the  expiration  of any  options  or  rights  related  to  such
              convertible or exchangeable  securities,  the Conversion  Price of
              the Series A Preferred Stock, to the extent in any way affected by
              or computed using such options, rights or securities or options or
              rights related to such  securities  (unless such options or rights
              were merely deemed to be included in the numerator and denominator
              for purposes of  determining  the number of shares of Common Stock
              outstanding  for  purposes  of  subsection  5(c)(i)(A)),  shall be
              recomputed to reflect the issuance of only the number of shares of
              Common Stock (and  convertible  or  exchangeable  securities  that
              remain  in  effect)  actually  issued  upon the  exercise  of such
              options  or  rights,  upon  the  conversion  or  exchange  of such
              securities  or upon the exercise of the options or rights  related
              to such securities.

                                  (5) The  number  of  shares  of  Common  Stock
              deemed issued and the consideration  deemed paid therefor pursuant
              to  subsections  5(c)(i)(E)(1)  and  (2)  shall  be  appropriately
              adjusted to reflect any change,  termination  or expiration of the
              type described in either subsection 5(c)(i)(E)(3) or (4).

                      (ii)  "Additional  Stock"  shall mean any shares of Common
Stock issued (or deemed to have been issued  pursuant to subsection  5(c)(i)(E))
by this corporation after the Purchase Date other than

                              (A) Common Stock issuable or issued  pursuant to a
         transaction described in subsection 5(c)(iii) hereof;

                              (B)  up  to  5,000,000   shares  of  Common  Stock
         issuable  or issued to  employees,  consultants  or  directors  of this
         corporation   directly  or  pursuant  to  a  stock  incentive  plan  or
         restricted  stock  plan  approved  by the  Board of  Directors  of this
         corporation;

                              (C)  up  to  16,131,815  shares  of  Common  Stock
         issuable or issued upon exercise of options or warrants  outstanding as
         of the Purchase Date;

                              (D) shares of Common Stock issuable or issued upon
         conversion  of  the  Series  A  Preferred  Stock  or  as  dividends  or
         distributions on the Series A Preferred Stock; or


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<PAGE>

                              (E) shares of Common  Stock  issued,  or shares of
         Common  Stock  issuable  upon the  conversion  of warrants  issued,  in
         connection with a private round of equity financing.

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

                      (iv) If the number of shares of Common  Stock  outstanding
at any time  after  the  Purchase  Date is  decreased  by a  combination  of the
outstanding  shares of Common  Stock,  then,  following  the record date of such
combination,  the  Conversion  Price for the Series A  Preferred  Stock shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion of each share of such series shall be decreased in proportion to such
decrease in outstanding shares.

                  (d) Other  Distributions.  In the event this corporation shall
declare a  distribution  payable in  securities of other  persons,  evidences of
indebtedness issued by this corporation or other persons, assets (excluding cash
dividends) or options or rights not referred to in subsection  5(c)(iii),  then,
in each such case for the purpose of this  subsection  5(d),  the holders of the
Series A Preferred Stock shall be entitled to a proportionate  share of any such
distribution  as though  they were the holders of the number of shares of Common
Stock of this  corporation  into which their shares of Series A Preferred  Stock
are convertible as of the record date fixed for the determination of the holders
of Common Stock of this corporation entitled to receive such distribution.

                  (e)  Recapitalizations.  If at any  time or from  time to time
there shall be a recapitalization of the Common Stock (other than a subdivision,
combination  or merger or sale of assets  transaction  provided for elsewhere in
this Section 5 or in Section 3)  provision  shall be made so that the holders of
the Series A Preferred  Stock  shall  thereafter  be  entitled  to receive  upon
conversion  of the  Series A  Preferred  Stock the  number of shares of stock or
other  securities or property of this corporation or otherwise to which a holder
of Common Stock


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<PAGE>


deliverable upon conversion  would have been entitled on such  recapitalization.
In any such case, appropriate adjustment shall be made in the application of the
provisions  of this  Section 5 with  respect to the rights of the holders of the
Series  A  Preferred  Stock  after  the  recapitalization  to the end  that  the
provisions of this Section 5 (including  adjustment of the Conversion Price then
in effect and the number of shares  purchasable  upon conversion of the Series A
Preferred  Stock) shall be applicable  after that event as nearly  equivalent as
may be practicable.

                  (f) No Impairment.  This corporation will not, by amendment of
its   Certificate   of    Incorporation    or   through   any    reorganization,
recapitalization,  transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action,  avoid or seek to avoid the
observance  or  performance  of any of the  terms to be  observed  or  performed
hereunder by this corporation, but will at all times in good faith assist in the
carrying  out of all the  provisions  of this Section 5 and in the taking of all
such  action  as may be  necessary  or  appropriate  in  order  to  protect  the
Conversion  Rights  of the  holders  of the  Series A  Preferred  Stock  against
impairment.

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

                      (i)  No  fractional   shares  shall  be  issued  upon  the
conversion  of any share or  shares of the  Series A  Preferred  Stock,  and the
number of shares of Common Stock to be issued shall be determined by rounding to
the nearest whole share. Such conversion shall be determined on the basis of the
total  number of shares of Series A  Preferred  Stock the  holder is at the time
converting  into  Common  Stock and such  rounding  shall apply to the number of
shares of Common Stock issuable upon such aggregate conversion.

                      (ii)   Upon  the   occurrence   of  each   adjustment   or
readjustment  of the  Conversion  Price of Series A Preferred  Stock pursuant to
this Section 5, this  corporation,  at its expense,  shall promptly compute such
adjustment or  readjustment  in accordance with the terms hereof and prepare and
furnish to each holder of Series A Preferred  Stock a certificate  setting forth
such adjustment or readjustment  and showing in detail the facts upon which such
adjustment or readjustment is based.  This corporation  shall,  upon the written
request at any time of any holder of Series A Preferred Stock,  furnish or cause
to be  furnished  to such  holder  a like  certificate  setting  forth  (A) such
adjustment  and  readjustment,  (B) the  Conversion  Price  for such  series  of
Preferred  Stock at the time in  effect,  and (C) the number of shares of Common
Stock  and the  amount,  if any,  of other  property  that at the time  would be
received upon the conversion of a share of Series A Preferred Stock.

                  (h) Notices of Record Date. In the event of any taking by this
corporation  of a record  of the  holders  of any  class of  securities  for the
purpose of  determining  the  holders  thereof  who are  entitled to receive any
dividend  (other  than a cash  dividend)  or other  distribution,  any  right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any  other  securities  or  property,  or  to  receive  any  other  right,  this
corporation

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<PAGE>


shall mail to each holder of Series A Preferred Stock, at least twenty (20) days
prior to the date specified  therein,  a notice specifying the date on which any
such record is to be taken for the  purpose of such  dividend,  distribution  or
right, and the amount and character of such dividend, distribution or right.

                  (i)  Reservation  of  Stock  Issuable  Upon  Conversion.  This
corporation  shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock and Preferred Stock,  solely for the purpose
of effecting the  conversion  of the shares of the Series A Preferred  Stock and
for paying the dividend  required  pursuant to Section 2 hereof,  such number of
its  shares of Common  Stock and  Preferred  Stock as shall from time to time be
sufficient to effect the  conversion of all  outstanding  shares of the Series A
Preferred  Stock and to pay all  accumulated  dividends;  and if at any time the
number of  authorized  but unissued  shares of Common  Stock or Preferred  Stock
shall not be  sufficient  for either  such  purpose,  in  addition to such other
remedies as shall be available  to the holder of such Series A Preferred  Stock,
this  corporation  will take such corporate action as may, in the opinion of its
counsel,  be necessary to increase its authorized but unissued  shares of Common
Stock or Preferred  Stock, as the case may be, to such number of shares as shall
be sufficient for such purposes, including, without limitation, engaging in best
efforts to obtain the requisite  stockholder approval of any necessary amendment
to this Certificate

                  (j) Notices.  Any notice  required by the  provisions  of this
Section 5 to be given to the holders of shares of Series A Preferred Stock shall
be deemed given if deposited in the United  States mail,  postage  prepaid,  and
addressed to each holder of record at his address appearing on the books of this
corporation.

         Section 6. Voting Rights.

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

                  (b) Voting for the Election of  Directors.  As long as 500,000
or more of the  shares of Series A  Preferred  Stock  originally  issued  remain
outstanding,  the holders of such  shares of Series A  Preferred  Stock shall be
entitled to elect two (2) directors of this  corporation


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at each annual  election of directors.  In the case of any vacancy (other than a
vacancy  caused by  removal)  in the  office of a director  occurring  among the
directors  elected by the  holders of the Series A Preferred  Stock  pursuant to
this Section 6(b), the remaining director so elected by that class or series (or
if there are no such  directors  remaining,  the  holders of a  majority  of the
shares of that class or series),  may elect a successor  or  successors  to hold
office for the unexpired term of the director or directors whose place or places
shall be vacant.  Any  director  who shall have been elected by the holders of a
class or series of stock or by any  directors  so  elected  as  provided  in the
immediately  preceding  sentence hereof may be removed during the aforesaid term
of office,  either with or without cause,  by, and only by, the affirmative vote
of the  holders of the shares of the class or series of stock  entitled to elect
such  director  or  directors,  given  either  at  a  special  meeting  of  such
stockholders  duly called for that  purpose or pursuant to a written  consent of
stockholders,  and any vacancy  thereby  created may be filled by the holders of
that  class or  series  of stock  represented  at the  meeting  or  pursuant  to
unanimous written consent.

         Section 7. Protective Provisions.

                  (a) So long as at least  500,000  shares of Series A Preferred
Stock remain  outstanding,  this corporation shall not take any of the following
actions  without first  obtaining the approval (by vote or written  consent,  as
provided  by law) of the  holders  of at least  662/3%  of the then  outstanding
shares of Series A Preferred Stock:

                      (i) alter or change the rights, preferences or privileges,
or the restrictions provided for the benefit of the shares of Series A Preferred
Stock;

                      (ii) authorize or issue, or obligate itself to issue,  any
other  equity  security,  including  any  other  security  convertible  into  or
exercisable  for any equity  security  having a preference  over,  or being on a
parity  with,  the Series A Preferred  Stock with  respect to  dividends or upon
liquidation; or

                      (iii) reclassify any outstanding  stock into shares having
a  preference  over,  or on a parity  with,  the Series A  Preferred  Stock with
respect to liquidation preferences or dividends.

         Section 8. Status of Converted Stock. In the event any shares of Series
A Preferred Stock shall be converted pursuant to Section 5 hereof, the shares so
converted shall be canceled and shall not be issuable by this  corporation.  The
Certificate of Incorporation of this corporation shall be appropriately  amended
to effect the corresponding  reduction in this corporation's  authorized capital
stock.

         This  Certificate  of  Designation  has been signed by the President of
this corporation on March __, 2001.

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                                ________________________________________________
                                President and Chief Executive Officer





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