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                               GRAPHIX ZONE, INC.

                              AMENDED AND RESTATED
                           CERTIFICATE OF DESIGNATIONS
                                       OF
                      SERIES A CONVERTIBLE PREFERRED STOCK

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

                            -------------------------

          Graphix Zone, Inc., a Delaware corporation (the "Corporation"), in
accordance with the provisions of Section 103 of the General Corporation Law of
the State of Delaware (the "DGCL") DOES HEREBY CERTIFY:

          That pursuant to authority vested in the Board of Directors of the
Corporation by the Certificate of Incorporation of the Corporation, the Board of
Directors of the Corporation, by unanimous written consent, dated September 13,
1996, adopted a resolution providing for the creation of a series of the
Corporation's Preferred Stock, $.01 par value, which series is designated
"Series A Convertible Preferred Stock", which resolution is as follows:

          RESOLVED, that pursuant to authority vested in the Board of Directors
of the Corporation by the Certificate of Incorporation, the Board of Directors
does hereby provide for the creation of a series of the Preferred Stock, $.01
par value (hereafter called the "Preferred Stock"), of the Corporation, and to
the extent that the voting powers and the designations, preferences and
relative, participating, optional or other special rights thereof and the
qualifications, limitations or restrictions of such rights have not been set
forth in the Certificate of Incorporation, as amended, of the Corporation, does
hereby fix the same as follows:

                      SERIES A CONVERTIBLE PREFERRED STOCK

          SECTION 1.     DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Convertible Preferred Stock" (the "Series A
Convertible Preferred Stock"), and the number of shares constituting the Series
A Convertible Preferred Stock shall be 3,000, and shall not be subject to
increase.

          SECTION 2.     STATED CAPITAL. The amount to be represented in stated
capital at all times for each share of Series A Convertible Preferred Stock
shall be the sum of (i)  $1,000, (ii) to the extent legally available, the
accrued but unpaid dividends on such share of Series A Convertible Preferred
Stock, and (iii) to be determined on at least a quarterly basis, an amount equal
to the accrued and unpaid interest on dividends in arrears through the date of
determination (as provided in Section 4).

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          SECTION 3.     RANK. All Series A Convertible Preferred Stock shall
rank (i) senior to the Common Stock, $.01 par value (collectively the "Common
Stock"), of the Corporation, now or hereafter issued, as to payment of dividends
and distribution of assets upon liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, and (ii) on a parity with any
additional series of preferred stock of any class which the Board of Directors
or the stockholders may from time to time authorize, both as to payment of
dividends and as to distributions of assets upon liquidation, dissolution, or
winding up of the Corporation, whether voluntary or involuntary.

          SECTION 4.     DIVIDENDS AND DISTRIBUTIONS. (a) The holders of shares
of Series A Convertible Preferred Stock shall be entitled to receive, when, as,
and if declared by the Board of Directors of the Corporation (the "Board of
Directors" or the "Board") out of funds legally available for such purpose,
dividends at the rate of $80.00 per annum per share, and no more, which shall be
fully cumulative, shall accrue without interest (except as otherwise provided
herein as to dividends in arrears) from the date of original issuance and shall
be payable in cash quarterly on January 1, April 1, July 1, and October 1 of
each year commencing January 1, 1997 (except that if any such date is a
Saturday, Sunday, or legal holiday, then such dividend shall be payable on the
next succeeding day that is not a Saturday, Sunday, or legal holiday) to holders
of record as they appear on the stock books of the Corporation on such record
dates, not more than 20 nor less than 10 days preceding the payment dates for
such dividends, as shall be fixed by the Board. Dividends on the Series A
Convertible Preferred Stock shall be paid in cash or, subject to the limitations
in Section 4(b) hereof, shares of Common Stock of the Corporation or any
combination of cash and shares of Common Stock, at the option of the Corporation
as hereinafter provided. The amount of the dividends payable per share of Series
A Convertible Preferred Stock for each quarterly dividend period shall be
computed by dividing the annual dividend amount by four. The amount of dividends
payable for the initial dividend period and any period shorter than a full
quarterly dividend period shall be computed on the basis of a 360-day year of 12
30-day months. Dividends not paid on a payment date, whether or not such
dividends have been declared, will bear interest at the rate of 14% per annum or
at such lesser rate as is legally permitted under applicable law, until paid. No
dividends or other distributions, other than dividends payable solely in shares
of Common Stock or other capital stock of the Corporation ranking junior as to
dividends to the Series A Convertible Preferred Stock (collectively, the "Junior
Dividend Stock"), shall be paid or set apart for payment on any shares of Junior
Dividend Stock, and no purchase, redemption, or other acquisition shall be made
by the Corporation of any shares of Junior Dividend Stock unless and until all
accrued and unpaid dividends on the Series A Convertible Preferred Stock and
interest on dividends in arrears at the rate specified herein shall have been
paid or declared and set apart for payment.

          If at any time any dividend on any capital stock of the Corporation
ranking senior as to dividends to the Series A Convertible Preferred Stock (the
"Senior Dividend Stock") shall be in arrears, in whole or in part, no dividend
shall be paid or declared and set apart for payment on the Series A Convertible
Preferred Stock unless and until all accrued and unpaid dividends with respect
to the Senior Dividend Stock, including the full dividends for the then current
dividend period, shall have been paid or declared and set apart for payment,
without interest. No full dividends shall be paid or declared and set apart for
payment on any class or series or the Corporation's capital stock ranking, as to
dividends, on a parity with the Series A Convertible Preferred Stock (the
"Parity


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Dividend Stock") for any period unless all accrued but unpaid dividends (and
interest on dividends in arrears at the rate specified herein) have been, or
contemporaneously are, paid or declared and set apart for such payment on the
Series A Convertible Preferred Stock. No full dividends shall be paid or
declared and set apart for payment on the Series A Convertible Preferred Stock
for any period unless all accrued but unpaid dividends have been, or
contemporaneously are, paid or declared and set apart for payment on the Parity
Dividend Stock for all dividend periods terminating on or prior to the date of
payment of such full dividends. When dividends are not paid in full upon the
Series A Convertible Preferred Stock and the Parity Dividend Stock, all
dividends paid or declared and set apart for payment upon shares of Series A
Convertible Preferred Stock (and interest on dividends in arrears at the rate
specified herein) and the Parity Dividend Stock shall be paid or declared and
set apart for payment pro rata, so that the amount of dividends paid or declared
and set apart for payment per share on the Series A Convertible Preferred Stock
and the Parity Dividend Stock shall in all cases bear to each other the same
ratio that accrued and unpaid dividends per share on the shares of Series A
Convertible Preferred Stock and the Parity Dividend Stock bear to each other.

          Any references to "distribution" contained in this Section 4 shall not
be deemed to include any stock dividend or distributions made in connection with
any liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary.

          (b)  If the Corporation elects in the exercise of its sole discretion
to issue shares of Common Stock in payment of dividends on the Series A
Convertible Preferred Stock, the Corporation shall issue and dispatch, or cause
to be issued and dispatched, to each holder of such shares a certificate
representing the number of whole shares of Common Stock arrived at by dividing
the per share Computed Price of such shares of Common Stock into the total
amount of cash dividends such holder would be entitled to receive if the
aggregate dividends on the Series A Convertible Preferred Stock held by such
holder which are being paid in shares of Common Stock were being paid in cash;
PROVIDED, HOWEVER, that if certificates representing shares of Common Stock are
issued and dispatched to holders of Series A Convertible Preferred Stock
subsequent to the third trading day after a dividend payment date, the
percentage used to calculate the Computed Price will be reduced by one
percentage point for each trading day after the third trading day following such
dividend payment date to the date of dispatch of shares of Common Stock. No
fractional shares of Common Stock shall be issued in payment of dividends. In
lieu thereof, the Corporation may issue a number of shares of Common Stock to
each holder which reflects a rounding up to the next highest whole number of
shares of Common Stock or may pay cash. The Corporation shall not exercise its
right to issue shares of Common Stock in payment of dividends on Series A
Convertible Preferred Stock if:

          (i)   the number of shares of Common Stock at the time authorized, 
     unissued and unreserved for all purposes, or held in the Corporation's 
     treasury, is insufficient to pay the portion of such dividends to be 
     paid in shares of Common Stock;

          (ii)  the issuance or delivery of shares of Common Stock as a dividend
     payment would require registration with or approval of any governmental 
     authority under any law or regulation, and such registration or approval 
     has not been effected or obtained;


                                        3

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          (iii) the shares of Common Stock to be issued as a dividend payment 
     have not been authorized for listing, upon official notice of issuance, 
     on any securities exchange or market on which the Common Stock is then 
     listed; or have not been approved for quotation if the Common Stock is 
     traded in the over-the-counter market;

          (iv)  the Computed Price (determined without regard to the proviso 
     to the definition thereof) is less than the par value of the shares of 
     Common Stock;

          (v)   the shares of Common Stock (A) cannot be sold or transferred 
     without restriction by unaffiliated holders who receive such shares of 
     Common Stock as a dividend payment or (B) are no longer listed on a 
     national securities exchange, on the Nasdaq National Market or the 
     Nasdaq SmallCap Market; or

          (vi) the issuance of shares of Common Stock in payment of dividends 
     on Series A Convertible Preferred Stock held by any Restricted Person 
     (as defined in Section 9(a) hereof) would result in any Restricted 
     Person beneficially owning more than 4.9% of the Common Stock, 
     determined as provided in the proviso to the second sentence of Section 
     9(a) hereof.

          Shares of Common Stock issued in payment of dividends on Series A
Convertible Preferred Stock pursuant to this Section shall be, and for all
purposes shall be deemed to be, validly issued, fully paid and nonassessable
shares of Common Stock of the Corporation; the issuance and delivery thereof is
hereby authorized; and the dispatch thereof will be, and for all purposes shall
be deemed to be, payment in full of the cumulative dividends to which holders
are entitled on the applicable dividend payment date.

          "Computed Price" of shares of Common Stock on any date means 100
percent of the arithmetic average of the per share Closing Price (as defined in
Section 9(b)) of the Common Stock on the five consecutive trading days ending on
the trading day immediately preceding the applicable dividend payment date;
PROVIDED HOWEVER, THAT, notwithstanding the foregoing, in no event shall the
Computed Price be less than $.01 per share.

          (c)  Notwithstanding any other provision of this Section 4, the
Corporation may elect by written notice mailed to the holders of the Series A
Convertible Preferred Stock at their addresses appearing on the records of the
Corporation not later than the payment date for such dividend not to declare or
make payment of the amount of any quarterly dividend to the holders of shares of
Series A Convertible Preferred Stock on the date therefor provided in Section
4(a), in which case, the accrued and unpaid dividends shall be taken into
account at the time of conversion of shares of Series A Convertible Preferred
Stock as provided in Section 9 and the Corporation shall have no further right
to pay or declare and set aside for payment such quarterly dividends not so
declared or paid on such payment date unless the Corporation declares and pays
dividends in an amount equal to 117.65 percent of the amount of the dividends
not so declared or paid on such payment date and otherwise in accordance with
Sections 4(a) and 4(b). Such dividends not so declared shall not bear interest.


                                        4

<PAGE>

          (d)  The Corporation shall not pay or declare and set apart for such
payment any dividend on shares of Common Stock, Junior Dividend Stock or Junior
Liquidation Stock (as defined herein) other than (1) dividends on shares of
Common Stock solely in the form of additional shares of Common Stock, (2)
dividends on Junior Dividend Stock solely in the form of shares of Common Stock
or additional shares of Junior Dividend Stock or (3) dividends on Junior
Liquidation Stock solely in the form of shares of Common Stock or additional
shares of Junior Liquidation Stock unless contemporaneously therewith, the
Corporation shall pay or declare and set apart for payment dividends on the
shares of Series A Convertible Preferred Stock in an amount per share of Series
A Convertible Preferred Stock equal to the aggregate amount of dividends the
holder of such share of Series A Convertible Preferred Stock would otherwise
have been entitled to receive had such holder converted such share of Series A
Convertible Preferred Stock in accordance with Section 9(a) (but without regard
to the limitations on conversion contained in the proviso to the second sentence
of Section 9(a) or in Section 9(d)) into shares of Common Stock as if the
Conversion Date (as defined herein) were the earlier of (x) the record date for
the payment of such dividend on shares of Common Stock, Junior Dividend Stock or
Junior Liquidation Stock, as the case may be, and (y) the trading day prior to
the date on which ex-dividend trading in the Common Stock, Junior Dividend Stock
or Junior Liquidation Stock, as the case may be, begins with respect to such
dividend thereon.

          (e)  Neither the Corporation nor any subsidiary of the Corporation
shall redeem, repurchase or otherwise acquire in any one transaction or series
of related transactions any shares of Common Stock, Junior Dividend Stock or
Junior Liquidation Stock if the number of shares so repurchased, redeemed or
otherwise acquired in such transaction or series of related transactions is more
than either (x) 5.0% of the number of shares of Common Stock, Junior Dividend
Stock or Junior Liquidation Stock, as the case may be, outstanding immediately
prior to such transaction or series of related transactions or (y) 1% of the
number of shares of Common Stock, Junior Dividend Stock or Junior Liquidation
Stock, as the case may be, outstanding immediately prior to such transaction or
series of related transactions if such transaction or series of related
transactions is with any one person or group of affiliated persons, unless the
Corporation or such subsidiary offers to purchase from each holder of shares of
Series A Convertible Preferred Stock at the time of such redemption, repurchase
or acquisition the same percentage of such holder's shares of Series A
Convertible Preferred Stock as the percentage of the number of outstanding
shares of Common Stock, Junior Dividend Stock or Junior Liquidation Stock, as
the case may be, to be so redeemed, repurchased or acquired at a purchase price
per share of Series A Convertible Preferred Stock equal to the product obtained
by multiplying (1) the number of shares of Common Stock into which such share of
Series A Convertible Preferred Stock could be converted in accordance with
Section 9(a) (but without regard to the limitations on conversion contained in
the proviso to the second sentence of Section 9(a)) on the date of purchase of
such share of Series A Convertible Preferred Stock times (2) the product of (x)
Conversion Percentage and (y) Computed Price of one share of Common Stock on the
date of purchase of such share of Series A Convertible Preferred Stock.

          (f)  Neither the Corporation nor any subsidiary of the Corporation
shall (1) make any tender offer or exchange offer (a "Tender Offer") for
outstanding shares of Common Stock unless the Corporation contemporaneously
therewith makes an offer or (2) enter into an agreement regarding a Tender Offer
for outstanding shares of Common Stock by any person other than the Corporation
or any subsidiary of the Corporation unless such person agrees with the
Corporation to


                                        5

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make an offer, in either such case to each holder of outstanding shares of
Series A Convertible Preferred Stock to purchase the same percentage of shares
of Series A Convertible Preferred Stock held by such holder as the percentage of
outstanding shares of Common Stock offered to be purchased in such Tender Offer
at a price per share of Series A Convertible Preferred Stock equal to the
product obtained by multiplying (1) the number of shares of Common Stock into
which such share of Series A Convertible Preferred Stock could be converted in
accordance with Section 9(a)  (but without regard to the limitations on
conversion contained in the proviso to the second sentence of Section 9(a)) on
the date of purchase of such share of Series A Convertible Preferred Stock times
(2) 117.65 percent of the cash price (or other consideration) per share of
Common Stock offered in such Tender Offer.

          SECTION 5.     LIQUIDATION PREFERENCE. In the event of a liquidation,
dissolution, or winding up of the Corporation, whether voluntary or involuntary,
the holders of Series A Convertible Preferred Stock shall be entitled to receive
out of the assets of the Corporation, whether such assets constitute stated
capital or surplus of any nature, an amount per share of Series A Convertible
Preferred Stock equal to the sum of (i) all dividends accrued and unpaid thereon
to the date of final distribution to such holders, (ii) accrued and unpaid
interest on dividends in arrears to the date of distribution at the rate
specified in Section 4(a), and (iii) $1,000.00 (collectively, "the Liquidation
Preference"), and no more, before any payment shall be made or any assets
distributed to the holders of Common Stock or any other class or series of the
Corporation's capital stock ranking junior as to liquidation rights to the
Series A Convertible Preferred Stock (collectively, the "Junior Liquidation
Stock"); PROVIDED, HOWEVER, that such rights shall accrue to the holders of
Series A Convertible Preferred Stock only in the event that the Corporation's
payments with respect to the liquidation preference of the holders of capital
stock of the Corporation ranking senior as to liquidation rights to the Series A
Convertible Preferred Stock (the "Senior Liquidation Stock") are fully met.
After the liquidation preferences of the Senior Liquidation Stock are fully met,
the entire assets of the Corporation available for distribution shall be
distributed ratably among the holders of the Series A Convertible Preferred
Stock and any other class or series of the Corporation's capital stock having
parity as to liquidation rights with the Series A Convertible Preferred Stock
(the "Parity Liquidation Stock") in proportion to the respective preferential
amounts to which each is entitled (but only to the extent of such preferential
amounts). After payment in full of the liquidation price of the shares of the
Series A Convertible Preferred Stock and the Parity Liquidation Stock, the
holders of such shares shall not be entitled to any further participation in any
distribution of assets by the Corporation. Neither a consolidation or merger of
the Corporation with another corporation nor a sale or transfer of all or part
of the Corporation's assets for cash, securities, or other property in and of
itself will be considered a liquidation, dissolution, or winding up of the
Corporation.

          SECTION 6.     NO MANDATORY REDEMPTION. The shares of Series A
Convertible Preferred Stock shall not be subject to mandatory redemption by the
Corporation.

          SECTION 7.     NO SINKING FUND. The shares of Series A Convertible
Preferred Stock shall not be subject to the operation of a purchase, retirement,
or sinking fund.

          SECTION 8.     NO OPTIONAL REDEMPTION. The shares of Series A
Convertible Preferred Stock shall not be subject to redemption at the option of
the Corporation.


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          SECTION 9.     CONVERSION.

          (a)  CONVERSION AT OPTION OF HOLDER. (i) Subject to the limitations
set forth in the legends to appear on certificates for the shares of Series A
Convertible Preferred Stock as provided in Section 9(a)(ii), the holders of the
Series A Convertible Preferred Stock may, upon surrender of the certificates
therefor, convert any or all of their shares of Series A Convertible Preferred
Stock into fully paid and nonassessable shares of Common Stock and such other
securities and property as hereinafter provided. Commencing on the respective
dates following issuance of shares of Series A Convertible Preferred Stock (such
date of initial issuance being referred to herein as the "Issuance Date") shown
on the certificates for shares of Series A Convertible Preferred Stock and at
any time thereafter to and including the day prior to the Mandatory Conversion
Date, each share of Series A Convertible Preferred Stock may be converted at the
principal executive offices of the Corporation, the office of any transfer agent
for the Series A Convertible Preferred Stock, if any, the office of any transfer
agent for the Common Stock or at such other office or offices, if any, as the
Board of Directors may designate, initially into such number of fully paid and
nonassessable shares of Common Stock (calculated as to each conversion to the
nearest 1/100th of a share) determined by dividing (x) the sum of (i) the
Conversion Amount, (ii) accrued but unpaid dividends to the Conversion Date on
the share of Series A Convertible Preferred Stock being converted, and (iii)
accrued but unpaid interest on the dividends on the share of Series A
Convertible Preferred Stock being converted in arrears to the Conversion Date by
(y) the lower of (1) the product of the Conversion Percentage TIMES the
arithmetic average of the Closing Price of the Common Stock on the five
consecutive trading days immediately preceding the Conversion Date or (2) the
Closing Price on the trading day prior to the first issuance of any share of
Series A Convertible Preferred Stock (subject to equitable adjustments for stock
splits, stock dividends, combinations, recapitalizations, reclassifications and
similar events occurring on or after the date of filing of this Certificate of
Designations with the Secretary of State of the State of Delaware), in each case
subject to adjustment as hereinafter provided (the "Conversion Rate"); PROVIDED,
HOWEVER, that in no event shall any holder be entitled to convert any shares of
Series A Convertible Preferred Stock in excess of that number of shares of
Series A Convertible Preferred Stock upon conversion of which the sum of (1) the
number of shares of Common Stock beneficially owned by such holder and any
person whose beneficial ownership of shares of Common Stock would be aggregated
with such holder's beneficial ownership of shares of Common Stock for purposes
of Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and Regulation 13D-G thereunder (each a "Restricted Person" and
collectively, the "Restricted Persons") (other than shares of Common Stock
deemed beneficially owned through the ownership of unconverted shares of Series
A Convertible Preferred Stock and unexercised Warrants) and (2) the number of
shares of Common Stock issuable upon the conversion of the number of shares of
Series A Convertible Preferred Stock with respect to which the determination in
this proviso is being made, would result in beneficial ownership by any
Restricted Person of more than 4.9% of the outstanding shares of Common Stock.
For purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and Regulation 13D-G thereunder, except as otherwise provided in clause (1)
of the proviso to the immediately preceding sentence. The "Conversion Price"
shall be equal to the Conversion Amount divided by the Conversion Rate.


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          (ii) Each certificate for shares of Series A Convertible Preferred
Stock shall, until such time as such legend, by its terms, no longer applies,
contain one of the following legends as agreed in writing by the initial holder
of such shares of Series A Convertible Preferred Stock at the time of original
issuance thereof:

     "THESE SECURITIES ARE NOT CONVERTIBLE AT THE OPTION OF THE HOLDER HEREOF
     UNTIL ON OR AFTER THE 60TH DAY FOLLOWING THE ORIGINAL ISSUANCE THEREOF."

     "THESE SECURITIES ARE NOT CONVERTIBLE AT THE OPTION OF THE HOLDER HEREOF
     UNTIL ON OR AFTER THE 90TH DAY FOLLOWING THE ORIGINAL ISSUANCE THEREOF."

     "THESE SECURITIES ARE NOT CONVERTIBLE AT THE OPTION OF THE HOLDER HEREOF
     UNTIL ON OR AFTER THE 120TH DAY FOLLOWING THE ORIGINAL ISSUANCE THEREOF."

Any new certificate issued upon transfer of any shares of Series A Convertible
Preferred Stock or, in connection with a conversion of shares of Series A
Convertible Preferred Stock, to evidence the unconverted balance of shares of
Series A Convertible Preferred Stock shall bear the same legend as the
certificate surrendered to the Corporation in connection herewith, if
applicable.

          (b)  CERTAIN DEFINITIONS.

          As used herein, the "Closing Price" of any security on any date shall
mean the closing bid price of such security on such date on the principal
securities exchange or market on which such security is traded.

          As used herein, the "Conversion Amount" initially shall be equal to
$1,000.00, subject to adjustment as hereinafter provided.

          As used herein, "Conversion Date" shall mean the date on which the
notice of conversion is actually received by the Corporation, in case of a
conversion at the option of the holder pursuant to Section 9(a).

          As used herein, "Conversion Percentage" shall mean 85 percent, except
that, I fin connection with a particular conversion of shares of Series A
Convertible Preferred Stock, the Corporation fails to issue and deliver the
certificates for the Common Stock issuable upon such conversion to the holder
converting such shares pursuant to the first sentence of paragraph 6 of
Section 9(c) hereof within five (5) business days after surrender of
certificates representing such shares, then the percentage stated above in this
paragraph shall be reduced with respect to the conversion of such shares by one
percentage point for each day following the third business day after such
surrender of certificates representing such shares of Series A Convertible
Preferred Stock for conversion to (but excluding) the date the Corporation
delivers to such holder the certificates for the shares of Common Stock issued
upon such conversion.


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<PAGE>

          As used herein, "Registration Statement" shall mean the Registration
Statement required to be filed by the Corporation with the SEC pursuant to
Section 2(a) of the Registration Rights Agreement.

          As used herein, "SEC" shall mean the United States Securities and
Exchange Commission.

          As used herein, "Registration Rights Agreement" shall mean the
Registration Rights Agreement between the Corporation and the original holder of
the Series A Convertible Preferred Stock.

          (c)  OTHER PROVISIONS. Notwithstanding anything in this Section 9 to
the contrary, no change in the Conversion Amount shall actually be made until
the cumulative effect of the adjustments called for by this Section 9 since the
date of the last change in the Conversion Amount would change the Conversion
Amount by more than 1%. However, once the cumulative effect would result in such
a change, then the Conversion Rate shall actually be changed to reflect all
adjustments called for by this Section 9 and not previously made.

          The holders of shares of Series A Convertible Preferred Stock at the
close of business on the record date for any dividend payment to holders of
Series A Convertible Preferred Stock shall be entitled to receive the dividend
payable on such shares on the corresponding dividend payment date
notwithstanding the conversion thereof after such dividend payment record date
or the Corporation's default in payment of the dividend due on such dividend
payment date; PROVIDED, HOWEVER, that the holder of shares of Series A
Convertible Preferred Stock surrendered for conversion during the period between
the close of business on any record date for a dividend payment and the opening
of business on the corresponding dividend payment date shall, promptly after
receipt, return to the Corporation the dividend payable on such shares on such
dividend payment date if such dividend shall have been paid by the Corporation
on such dividend payment date. A holder of shares of Series A Convertible
Preferred Stock on a record date for a dividend payment who (or whose
transferee) tenders any of such shares for conversion into shares of Common
Stock on or after such dividend payment date will receive the dividend payable
by the Corporation on such shares of Series A Convertible Preferred Stock on
such date, and the converting holder need not include payment of the amount of
such dividend upon surrender of shares of Series A Convertible Preferred Stock
for conversion. Except as provided above, no adjustment shall be made in respect
of cash dividends on Common Stock or Series A Convertible Preferred Stock that
may be accrued and unpaid at the date of surrender for conversion.

          The right of the holders of Series A Convertible Preferred Stock to
convert their shares shall be exercised by delivering to the Corporation or its
agent, as provided above, a written notice, duly signed by or on behalf of the
holder, stating the number of shares of Series A Convertible Preferred Stock to
be converted. Promptly, but in no event later than ten business days after
delivery of a notice of conversion, such holder shall surrender for such purpose
to the Corporation or its agent, as provided above, certificates representing
shares to be converted, duly endorsed in blank or accompanied by proper
instruments of transfer. If such holder shall fail to deliver certificates
representing shares to be converted in such form on or prior to such tenth


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<PAGE>


business day, such notice of conversion shall not be effective, unless otherwise
agreed by the Corporation, but such failure shall not affect such holder's right
to convert such shares at a date after the date such notice of conversion was
given. The Corporation shall pay any tax arising in connection with any
conversion of shares of Series A Convertible Preferred Stock except that the
Corporation shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery upon conversion of
shares of Common Stock or other securities or property in a name other than that
of the holder of the shares of the Series A Convertible Preferred Stock being
converted, and the Corporation shall not be required to issue or deliver any
such shares or other securities or property unless and until the person or
persons requesting the issuance thereof shall have paid to the Corporation the
amount of any such tax or shall have established to the satisfaction of the
Corporation that such tax has been paid.

          The Corporation (and any successor corporation) shall take all action
necessary so that a number of shares of the authorized but unissued Common Stock
(or common stock in the case of any successor corporation) sufficient to provide
for the conversion of the Series A Convertible Preferred Stock outstanding upon
the basis hereinbefore provided are at all times reserved by the Corporation (or
any successor corporation), free from preemptive rights, for such conversion,
subject to the provisions of the next succeeding paragraph. If the Corporation
shall issue any securities or make any change in its capital structure which
would change the number of shares of Common Stock into which each share of the
Series A Convertible Preferred Stock shall be convertible as herein provided,
the Corporation shall at the same time also make proper provision so that
thereafter there shall be a sufficient number of shares of Common Stock
authorized and reserved, free from preemptive rights, for conversion of the
outstanding Series A Convertible Preferred Stock on the new basis. If at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all of the outstanding shares of Series A
Convertible Preferred Stock, the Corporation promptly shall seek such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose.

          In case of any consolidation or merger of the Corporation with any
other corporation (other than a wholly-owned subsidiary of the Corporation) in
which the Corporation is not the surviving corporation, or in case of any sale
or transfer of all or substantially all of the assets of the Corporation, or in
the case of any share exchange pursuant to which all of the outstanding shares
of Common Stock are converted into other securities or property, the Corporation
shall make appropriate provision or cause appropriate provision to be made so
that each holder of shares of Series A Convertible Preferred Stock then
outstanding shall have the right thereafter to convert such shares of Series A
Convertible Preferred Stock into the kind and amount of shares of stock and
other securities and property receivable upon such consolidation, merger, sale,
transfer, or share exchange by a holder of the number of shares of Common Stock
into which such shares of Series A Convertible Preferred Stock could have been
converted immediately prior to the effective date of such consolidation, merger,
sale, transfer, or share exchange. If, in connection with any such
consolidation, merger, sale, transfer, or share exchange, each holder of shares
of Common Stock is entitled to elect to receive either securities, cash, or
other assets upon completion of such transaction, the Corporation shall provide
or cause to be provided to each holder of Series A Convertible Preferred Stock
the right to elect the securities, cash, or other assets into which the Series A


                                       10

<PAGE>

Convertible Preferred Stock held by such holder shall be convertible after
completion of any such transaction on the same terms and subject to the same
conditions applicable to holders of the Common Stock (including, without
limitation, notice of the right to elect, limitations on the period in which
such election shall be made, and the effect of failing to exercise the
election). The Corporation shall not effect any such transaction unless the
provisions of this paragraph have been complied with. The above provisions shall
similarly apply to successive consolidations, mergers, sales, transfers, or
share exchanges.

          If a holder shall have given a notice of conversion of shares of
Series A Convertible Preferred Stock, upon surrender of certificates
representing shares of Series A Convertible Preferred Stock for conversion, the
Corporation shall issue and deliver to such person at an address within the
United States specified by such person certificates for the Common Stock
issuable upon such conversion within three business days after such surrender of
certificates and the person converting shall be deemed to be the holder of
record of the Common Stock issuable upon such conversion, and all rights with
respect to the shares surrendered shall forthwith terminate except the right to
receive the Common Stock or other securities, cash, or other assets as herein
provided. If a holder shall have given a notice of conversion as provided
herein, the Corporation's obligation to issue and deliver the certificates for
Common Stock shall be absolute and unconditional, irrespective of the absence of
any action by the converting holder to enforce the same, any waiver or consent
with respect to any provision thereof, the recovery of any judgment against any
person or any action to enforce the same, any failure or delay in the
enforcement of any other obligation of the Corporation to the holder of record,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the holder of any obligation to the Corporation, and
irrespective of any other circumstance with might otherwise limit such
obligation of the Corporation to the holder in connection with such conversion.
If the Corporation fails to issue and deliver the certificates for the Common
Stock to the holder converting shares of Series A Convertible Stock pursuant to
the first sentence of this paragraph as and when required to do so, in addition
to any other liabilities the Corporation may have hereunder and under applicable
law, the Corporation shall pay or reimburse such holder on demand for all out-
of-pocket expenses including, without limitation, fees and expenses of legal
counsel incurred by such holders as a result of such failure.

          No fractional shares of Common Stock shall be issued upon conversion
of Series A Convertible Preferred Stock but, in lieu of any fraction of a share
of Common Stock which would otherwise be issuable in respect of the aggregate
number of such shares surrendered for conversion at one time by the same holder,
the Corporation at its option (a) may pay in cash an amount equal to the product
of (i) the arithmetic average of the Closing Price of a share of Common Stock on
the three consecutive trading days ending on the trading day immediately
preceding the Conversion Date and (ii) such fraction of a share or (b) may issue
an additional share of Common Stock.

          The Conversion Amount shall be adjusted from time to time under
certain circumstances, subject to the provisions of the first three sentences of
the first paragraph of this Section 9(c), as follows:

          (i) In case the Corporation shall issue rights or warrants on a pro
rata basis to all holders of the Common Stock entitling such holders to
subscribe for or purchase Common Stock on


                                       11

<PAGE>

the record date referred to below at a price per share less than the average
daily Closing Prices of the Common Stock on the 30 consecutive business days
commencing 45 business days before the record date (the "Current Market Price")
excluding, however, any rights issued pursuant to the Rights Agreement, then in
each such case the Conversion Amount in effect on such record date shall be
adjusted in accordance with the formula

     C1 = C x     O + N
                  -----
                O + N x P
                    -----
                      M
where

     C1   =    the adjusted Conversion Amount
     C    =    the current Conversion Amount
     O    =    the number of shares of Common Stock outstanding on the record
               date.
     N    =    the number of additional shares of Common Stock issuable pursuant
               to the exercise of such rights or warrants.
     P    =    the offering price per share of the additional shares (which
               amount shall include amounts received by the Corporation in
               respect of the issuance and the exercise of such rights or
               warrants).
     M    =    the Current Market Price per share of Common Stock on the record
               date.

Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants. If
any or all such rights or warrants are not so issued or expire or terminate
before being exercised, the Conversion Amount then in effect shall be readjusted
appropriately.

          (ii) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Junior Stock (as hereinafter defined) evidences
of its indebtedness or assets (including securities, but excluding any warrants
or subscription rights referred to in subparagraph (i) above and any dividend or
distribution paid in cash out of the retained earnings of the Corporation), then
in each such case the Conversion Amount then in effect shall be adjusted in
accordance with the formula

     C1   =    C x    M
                    -----
                    M - F
where

     C1   =    the adjusted Conversion Amount
     C    =    the current Conversion Amount
     M    =    the Current Market Price per share of Common Stock on the record
               date mentioned below.
     F    =    the aggregate amount of such cash dividend and/or the fair market
               value on the record date of the assets or securities to be
               distributed divided by the number of shares of Common Stock
               outstanding on the record date. The Board of Directors shall
               determine such fair market value, which determination shall be
               conclusive.


                                       12

<PAGE>

Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution.
For purposes of this subparagraph (ii), "Junior Stock" shall include any class
of capital stock ranking junior as to dividends or upon liquidation to the
Series A Convertible Preferred Stock.

          (iii) All calculations hereunder shall be made to the nearest cent or
to the nearest 1/100 of a share, as the case may be.

          (iv) If at any time as a result of an adjustment made pursuant to the
fifth paragraph of this Section 9(c), the holder of any Series A Convertible
Preferred Stock thereafter surrendered for conversion shall become entitled to
receive securities, cash, or assets other than Common Stock, the number or
amount of such securities or property so receivable upon conversion shall be
subject to adjustment from time to time in a manner and on terms nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in subparagraphs (i) to (iii) above.

          Except as otherwise provided above in this Section 9, no adjustment in
the Conversion Amount shall be made in respect of any conversion for share
distributions or dividends theretofore declared and paid or payable on the
Common Stock.

          Whenever the Conversion Amount is adjusted as herein provided, the
Corporation shall send to each transfer agent, if any, for the Series A
Convertible Preferred Stock and the Common Stock, and to the principal
securities exchange, if any, on which the Series A Convertible Preferred Stock
and the Common Stock is traded, or the Nasdaq National Market if the Series A
Convertible Preferred Stock or Common Stock is admitted for a quotation thereon,
a statement signed by the Chairman of the Board, the President, or any Vice
President of the Corporation and by its Treasurer or its Secretary or an
Assistant Secretary stating the adjusted Conversion Amount determined as
provided in this Section 9, and any adjustment so evidenced, given in good
faith, shall be binding upon all stockholders and upon the Corporation. Whenever
the Conversion Amount is adjusted, the Corporation will give notice by mail to
the holders of record of Series A Convertible Preferred Stock, which notice
shall be made within 15 days after the effective date of such adjustment and
shall state the adjustment and the Conversion Amount. Notwithstanding the
foregoing notice provisions, failure by the Corporation to give such notice or a
defect in such notice shall not affect the binding nature of such corporate
action of the Corporation.

          Whenever the Corporation shall propose to take any of the actions
specified in the fifth paragraph of this Section 9(c) or in subparagraphs (i) or
(ii) of the eighth paragraph of this Section 9(c) which would result in any
adjustment in the Conversion Amount under this Section 9(c), the Corporation
shall cause a notice to be mailed at least 20 days prior to the date on which
the books of the Corporation will close or on which a record will be taken for
such action, to the holders of record of the outstanding Series A Convertible
Preferred Stock on the date of such notice. Such notice shall specify the action
proposed to be taken by the Corporation and the date as of which holders of
record of the Common Stock shall participate in any such actions or be entitled
to exchange their Common Stock for securities or other property, as the case may
be. Failure by the Corporation to mail the notice or any defect in such notice
shall not affect the validity of the transaction.


                                       13

<PAGE>

          Notwithstanding any other provision of this Section 9, no adjustment
in the Conversion Amount need be made (a) for a transaction referred to in
subparagraphs (i) or (ii) of the eighth paragraph of this Section 9(c) if
holders of Series A Convertible Preferred Stock are to participate in the
transaction or distribution on a basis and with notice that the Board of
Directors determines such transaction to be fair to the holders of the Series A
Convertible Preferred Stock and appropriate in light of the basis on which
holders of the Common Stock or, in the case of a transaction referred to in said
subparagraph (ii), holders of Junior Stock participate in the transaction; (b)
for sales of Common Stock pursuant to a plan for reinvestment of dividends and
interest, PROVIDED that the purchase price in any such sale is at least equal to
the fair market value of the Common Stock at the time of such purchase, or
pursuant to any plan adopted by the Corporation for the benefit of its
employees, directors, or consultants; or (c) after such time as a holder of
shares of Series A Convertible Preferred Stock becomes entitled to receive only
cash upon conversion of such shares (in which case no interest shall accrue on
the amount of such cash for any period prior to the date which is three business
days after surrender of the certificates for such shares for conversion).

          (d)  MANDATORY CONVERSION. So long as the Corporation shall be in
compliance in all material respects with its obligations to the holders of the
Series A Convertible Preferred Stock (including its obligations under the
Registration Rights Agreement and the provisions of this Certificate of
Designations) and so long as the Registration Statement shall be effective (or
all the shares of Common Stock into which shares of Series A Convertible
Preferred Stock then outstanding are convertible may be sold by each holder of
record of such shares of Series A Convertible Preferred Stock within a period of
three months under Rule 144), on the date which is 730 days after the Issuance
Date (the "Mandatory Conversion Date") all of the shares of Series A Convertible
Preferred Stock then outstanding shall be converted, in accordance with the
provisions, and subject to the limitations, of Section 9(a), into shares of
Common Stock to the extent the same are at such time convertible into shares of
Common Stock. On the Mandatory Conversion Date, the Corporation shall mail by
first class mail or otherwise deliver to each holder of Series A Convertible
Preferred Stock a notice (a "Section 9(d) Notice"), which shall state (1) the
number of shares of Series A Convertible Preferred Stock held by such holder
which have been converted into shares of Common Stock in accordance with this
Section 9(d) and (2) the Mandatory Conversion Date. If the Corporation shall
give a Section 9(d) Notice, then, unless theretofore converted by the holder in
accordance herewith, and so long as the Registration Statement shall remain
effective on the Mandatory Conversion Date (or all the shares of Common Stock
into which shares of Series A Convertible Preferred Stock then outstanding are
convertible may be sold by each holder of record of such shares of Series A
Convertible Preferred Stock within a period of three months under Rule 144) and
the Corporation shall be in compliance in all material respects with its
obligations to the holders of the Series A Convertible Preferred Stock
(including its obligations under the Registration Rights Agreements and the
provisions of this Certificate of Designations) on the Mandatory Conversion
Date, then on the Mandatory Conversion Date properly set forth therein, all
shares of Series A Convertible Preferred Stock which, on the Mandatory
Conversion Date are convertible in accordance with Section 9(a) hereof, shall be
converted into such number of shares of Common Stock as shall be determined
pursuant to this Section 9 as if the conversion of such number of shares of
Series A Convertible Preferred Stock were made by the holders thereof in
accordance herewith and as if the Mandatory Conversion Date were the Conversion
Date. Upon the surrender of certificates for shares of Series A Convertible
Preferred Stock by the holder after a Section 9(d)


                                       14

<PAGE>

Notice is given, the Corporation shall issue and, within three trading days
after such surrender, deliver to or upon the order of such holder that number of
shares of Common Stock as shall be issuable in respect to the conversion of the
number of shares of Series A Convertible Preferred Stock converted, together
with accrued and unpaid dividends thereon to the date of conversion and accrued
and unpaid interest on dividends on such shares which are in arrears, into
Common Stock as shall be determined in accordance herewith.

          SECTION 9.     VOTING RIGHTS. Except as otherwise required by law or
expressly provided herein, shares of Series A Convertible Preferred Stock shall
not be entitled to vote on any matter.

          The affirmative vote or consent of the holders of a majority of the
outstanding shares of the Series A Convertible Preferred Stock, voting
separately as a class, will be required for (1) any amendment, alteration, or
repeal, whether by merger or consolidation or otherwise, of the Corporation's
Certificate of Incorporation if the amendment, alteration, or repeal materially
and adversely affects the powers, preferences, or special rights of the Series A
Convertible Preferred Stock, or (2) the creation and issuance of any Senior
Dividend Stock or Senior Liquidation Stock; PROVIDED, HOWEVER, that any increase
in the authorized preferred stock of the Corporation or the creation and
issuance of any stock which is both Junior Dividend Stock and Junior Liquidation
Stock or any other capital stock of the Corporation ranking on a parity with the
Series A Convertible Preferred Stock shall not be deemed to affect materially
and adversely such powers, preferences, or special rights.

          SECTION 10.    OUTSTANDING SHARES. For purposes of this Certificate of
Designations, all shares of Series A Convertible Preferred Stock shall be deemed
outstanding except (i) from the date of surrender of certificates representing
shares of Series A Convertible Preferred Stock for conversion into Common Stock,
all shares of Series A Convertible Preferred Stock converted into Common Stock
and (ii) from the date of registration of transfer, all shares of Series A
Convertible Preferred Stock held of record by the Corporation or any subsidiary
or Affiliate (as defined herein) of the Corporation. For the purposes of this
Certificate of Designations, "Affiliate" means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Corporation. "Control" is the power to direct the management and policies of a
person, directly or through one or more intermediaries, whether through the
ownership of voting securities, by contract, or otherwise.

          IN WITNESS WHEREOF, Graphix Zone, Inc. has caused its corporate seal
to be hereunto affixed and this certificate to be signed by Charles R.
Cortright, Jr., its President, as of the 13th day of September, 1996.


                              By: /S/CHARLES R. CORTRIGHT, JR.
                                  --------------------------------------------
                                   Charles R. Cortright, Jr., President


                                       15