CERTIFICATE OF DESIGNATION
                                       OF
                             RIGHTS AND PREFERENCES
                                       OF
                      SERIES C CONVERTIBLE PREFERRED STOCK
                                       OF
                         BRISTOL RETAIL SOLUTIONS, INC.

                  BRISTOL RETAIL SOLUTIONS, INC., a corporation organized and
existing under the General Corporation Law of the State of Delaware, hereby
certifies that, pursuant to the authority contained in article four of its
certificate of incorporation, as amended, and in accordance with the provisions
of Section 151 of the General Corporation Law of the State of Delaware, its
Board of Directors has adopted the following resolution creating a series of its
preferred stock designated as Series C Convertible Preferred Stock:

                  RESOLVED, that a series of the class of authorized Preferred
Stock of the Corporation be, and hereby is, created, and that the designation
and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof, are as follows:

SECTION 1.        SHARES AND CLASSES AUTHORIZED.

         Five hundred thousand (500,000) of the four million (4,000,000)
preferred shares that are authorized by article four of this corporation's
certificate of incorporation are hereby designated series C convertible
preferred shares, $.01 par value (hereinafter referred to as "Series C Preferred
Shares") and the rights and preferences of such Series C Preferred Shares shall
be set forth in section 2. The term "Series B Preferred Shares" as used herein
shall mean this corporation's 1,000,000 authorized shares of Series B
Convertible Preferred Stock, as authorized by this corporation's "Certificate of
Designation of Rights and Preferences of Series B Convertible Preferred Stock."
The term "Series B Participating Preferred Stock" shall mean this corporation's
100,000 authorized shares of Series B Participating Preferred Stock. The Series
B Preferred Shares, the Series B Participating Preferred Shares and the Series C
Preferred Shares are sometimes referred to herein as the "Preferred Shares."
"Common Shares" as used herein shall refer to the shares of this corporation's
common stock authorized under article four of this corporation's articles of
incorporation. Common Shares and Preferred Shares are herein sometimes referred
to collectively as "Capital Stock".

SECTION 2.        DESCRIPTION OF SERIES C PREFERRED SHARES.

         The rights, preferences, privileges and restrictions granted to or
imposed upon Series C Preferred Shares or the holders thereof are as follows:


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         (A)      VOTING RIGHTS; BOARD OF DIRECTORS.

         The holders of Series C Preferred Shares shall have the right, voting
separately as a class, to designate and elect one (1) member of the Board of
Directors at all meetings of shareholders of the Company at which the board of
directors is to be elected; except as otherwise provided in subsection 2(C)(3),
the holders of Series C Preferred Shares shall have no rights as to the election
of any other members of the Board of Directors. Each holder of Series C
Preferred Shares shall have the special voting rights which are described in
subsection 2(C)(3). No holder of any Series C Preferred Shares shall have any
cumulative voting rights. Except as set forth in this subsection 2(A) or in
subsection 2(C)(3), the Series C Preferred Shares shall not be voting shares.

         (B)      PREEMPTIVE RIGHTS.

         No holders of Series C Preferred Shares shall be entitled as such, as a
matter of right, to subscribe for, purchase or receive any part of any stock of
this corporation of any class whatsoever, or of securities convertible into or
exchangeable for any stock of any class whatsoever, whether now or hereafter
authorized and whether issued for cash or other consideration or by way of
dividend.

         (C)      OTHER RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS.

         (1) DIVIDENDS. The holders of Series C Preferred Shares shall be
entitled to receive out of any funds at any time legally available for the
declaration of dividends, cash dividends at the rate of $.24 per annum per
share, such dividends to be payable quarterly not later than the last business
day of each March, June, September and December. Dividends on Series C Preferred
Shares shall start to accrue on January 11, 2000, or the date of original
issuance, whichever is later, and shall be cumulative thereafter, whether or not
earned or declared.

         Upon the occurrence of an event of default (an "Event of Default")
under Section XI of the Investment Agreement (which Investment Agreement may be
amended without the approval of the shareholders of this corporation), which
Event of Default has remained uncured for a period of sixty (60) days after the
date the holders of a majority of the Series C Preferred Shares shall give
notice to the Company of such Event of Default, the dividend rate on the Series
C Preferred Shares shall thereupon be adjusted, and for the period from the date
of such notice from the holder to the Company of such Event of Default, until
the date the Company shall cure all outstanding Events of Default, shall be
equal to $.36 per annum, per share.

         In no event shall any dividend be paid or declared, nor shall any
distribution be made on the Series A Preferred Shares, the Series B Preferred
Shares, the Series B Participating Preferred Shares or the Common Shares, nor
shall any Series B Preferred Shares, Series B Participating Preferred Shares or
Common Shares be purchased, redeemed or otherwise acquired by the corporation
for value, unless all dividends on the Series C Preferred Shares for all past
quarterly dividend periods and for the then current quarterly dividend period
shall have been paid or declared and a sum sufficient for the payment thereof
set apart for payment.


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<PAGE>

         (2) LIQUIDATION RIGHT AND PREFERENCE. In the event of the liquidation,
dissolution or winding up of this corporation, whether voluntary or involuntary,
the holders of Series C Preferred Shares shall be entitled to receive in cash,
out of the assets of this corporation, an amount equal to $2.00 per share (the
"Base Liquidation Preference") for each outstanding Series C Preferred Share,
plus all accumulated but unpaid dividends, before any payment shall be made or
any assets distributed to the holders of the Series B Preferred Shares, the
Series B Participating Preferred Shares, the Common Shares or any other class of
shares of this corporation ranking junior to Series C Preferred Shares. If, upon
any liquidation or dissolution of this corporation, the assets of this
corporation are insufficient to pay such $2.00 per share, plus all accumulated
but unpaid dividends, the holders of such Series C Preferred Shares shall share
pro rata in any such distribution in proportion to the full amounts to which
they would otherwise be respectively entitled. Following such payment to the
holders of Series C Preferred Shares upon such liquidation, dissolution or
winding up of this corporation, the holders of series of Preferred Shares other
than the Series C Preferred Shares shall be entitled to receive in cash, out of
the assets of this corporation and to the exclusion of any further payment on
the Series C Preferred Shares, an amount equal to the liquidation preference per
share for each outstanding of such Preferred Shares, plus all accumulated but
unpaid dividends, before any payment shall be made or any assets distributed to
the holders of Common Shares or any other class of shares of this corporation
ranking junior to the Series B Preferred Shares. After such payments to the
Series C Preferred Shares and series of Preferred Shares other than the Series C
Preferred Shares, upon such liquidation, dissolution or winding up of this
corporation, the holders of Common Shares shall then be entitled, to the
exclusion of the holders of Preferred Shares, to receive in cash, out of the
assets of this corporation, an amount equal to the aggregate paid-in capital
reflected on the financial statements of this corporation as of the date of such
distribution, with such distribution being made on a pro rata basis to the
holders of all outstanding Common Shares. Following such payment to the holders
of Common Shares, the holders of Common Shares and the holders of Preferred
Shares shall be entitled to share ratably in all the assets of this corporation
thereafter remaining. For purposes of this joint distribution of assets to the
holders of Common Shares and the holders of Preferred Shares, the holders of the
Series C Preferred Shares should be regarded as owning that number of Common
Shares into which the Series C Preferred Shares would then be convertible.

         (3) SPECIAL VOTING RIGHTS. Without the affirmative vote of the holders
(acting together as a class) of at least a majority (with respect to (a), (b),
(c) and (e) below) or at least 90% (with respect to (d) below) of Series C
Preferred Shares at the time outstanding given in person or by proxy at any
annual meeting, or at such special meeting called for that purpose, or, if
permitted by law, in writing without a meeting, this corporation shall not:

                  (a) authorize or issue any (i) additional Series C Preferred
         Shares or (ii) shares of stock having priority over Series C Preferred
         Shares or ranking on a parity therewith as to the payment of dividends
         or as to the payment or distribution of assets upon the liquidation or
         dissolution, voluntary or involuntary, of this corporation; or


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<PAGE>

                  (b) declare or pay any dividend or make any other distribution
         on any shares of Capital Stock of this corporation at any time created
         and issued ranking junior to the Series C Preferred Shares with respect
         to the right to receive dividends and the right to the distribution of
         assets upon liquidation, dissolution or winding up of this corporation
         (hereinafter called "Junior Stock"), other than dividends or
         distributions payable solely in shares of Junior Stock, or purchase,
         redeem or otherwise acquire for any consideration (other than in
         exchange for or out of the net cash proceeds of the contemporaneous
         issue or sale of other shares of Junior Stock), or set aside as a
         sinking fund or other fund for the redemption or repurchase of any
         shares of Junior Stock or any warrants, rights or options to purchase
         shares of Junior Stock except as specifically permitted by the terms of
         the investment agreement, dated January 11, 2000, between this
         corporation and the investor listed therein, as it may be amended from
         time to time (the "Investment Agreement");

                  (c) issue Common Shares at a price below what is at the time
         of issuance the fair market value per share, or any stock purchase
         rights, except for such share issuances or stock purchase rights
         specifically permitted by the terms of the Investment Agreement;

                  (d) alter or amend the rights or preferences of the Series C
         Preferred Shares as stated in these articles of incorporation;

                  (e) sell, lease, license or otherwise dispose of all or
         substantially all of its assets, or consolidate with or merge into any
         other corporation or entity, or permit any other corporation or entity
         to consolidate or merge into it, except that (i) any subsidiary of this
         corporation may merge into another subsidiary or into this corporation,
         and (ii) this corporation may consolidate or merge with or into another
         corporation if the shareholders of this corporation immediately prior
         to such merger or consolidation own at least eighty percent (80%) of
         the equity of the combined entity immediately after such merger or
         consolidation becomes effective; or

                  (f) increase the size of its board of directors to a number
         greater than seven (7).

                  If (i) this corporation fails to pay any dividend on the
Series C Preferred Shares when and as required, whether or not earned or
declared, or to comply with any redemption obligation set forth in subsection
2(C)(5), whether or not funds are available to effect such redemption
obligation, which failure has remained uncured for a period of sixty (60) days
after the date the holders of a majority of the Series C Preferred Shares shall
give written notice to the Company of such failure, then: (i) the holders of
Series C Preferred Shares, voting jointly as a separate class, shall be entitled
to designate and elect three (3) of the members of this corporation's Board of
Directors (the "Default Directors"), and the holders of Common Shares, voting
jointly as a separate class, shall be entitled to designate and elect three (3)


                                      -4-
<PAGE>

directors; and the remaining director of the Corporation shall be designated and
approved by a majority of each of the Series C Preferred Shares and the Common
Shares, each voting separately as a class. If each of the holders of the Series
C Preferred Shares and the Common Shares, voting as a class, shall fail to
approve a nominee for the remaining director seat, such seat shall be filled by
the vote of the holders of the Series C Preferred Shares and the Common Shares
voting together as a single class, with the holders of the Series C Shares
casting a number of votes equal to the number of Common Shares into which all of
the Series C Shares are then convertible, provided that any nominee for such
position shall meet the requirements for qualification as an "independent"
director, as such term is defined in the rules of the New York Stock Exchange.
The right of the holders of Series C Preferred Shares to designate and elect the
Default Directors may be exercised until such time as this corporation's
redemption obligation has been complied with or funds sufficient therefor have
been deposited in trust, and until the Event of Default under the Investment
Agreement has been cured or waived. When such redemption obligation shall have
been complied with, or when funds sufficient therefor shall have been deposited
in trust, or when such Event of Default under the Investment Agreement shall
have been cured or waived, the President of this corporation shall call a
meeting of shareholders at which all directors shall be elected anew, and the
term of office of all persons who are then directors shall terminate immediately
upon the election of their successors; subject always to the same provisions in
the vesting of such right in the holders of the Series C Preferred Shares in the
case of any future redemption default or in the case of the occurrence of any
future Event of Default under the Investment Agreement.

         The foregoing right of the holders of Series C Preferred Shares with
respect to the election of directors of this corporation may be exercised at any
annual meeting of shareholders or, within the limitations hereinafter provided,
at a special meeting of the shareholders. If the date upon which such right of
the holders of Series C Preferred Shares shall become vested shall be more than
thirty (30) days preceding the date of the next ensuing annual meeting of
shareholders as fixed by the Bylaws of this corporation, the President of this
corporation shall, immediately after delivery to this corporation at its
principal office of a request to such effect signed by the holders of at least a
majority of Series C Preferred Shares then outstanding, call a special meeting
of the shareholders, to be held within sixty (60) days after the delivery of
such request for the purpose of electing the directors who they shall designate
as the representatives of Series C Preferred Shares on the Board of Directors,
which directors shall serve until the next annual meeting, until their
successors shall be elected and shall qualify or until they are divested of such
office pursuant to the immediately preceding paragraph. Notice of such meeting
shall be mailed to each shareholder not less than twenty (20) days prior to the
date of such meeting.

         Whenever the holders of Series C Preferred Shares shall be entitled to
elect the Default Directors, any holder of such Series C Preferred Shares shall
have the right, during regular business hours, in person or by a duly authorized
representative, to examine and to make transcripts of the stock records of this
corporation for Series C Preferred Shares for the purpose of communicating with
other holders of Series C Preferred Shares with respect to the exercise of such
right of election.


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<PAGE>

         At any annual or special meeting of shareholders held for the purpose
of electing directors when the holders of Series C Preferred Shares shall be
entitled to elect the Default Directors, the presence in person or by proxy of
the holders of a majority of the outstanding Series C Preferred Shares shall be
required to constitute a quorum for the election by such class of such
directors, and the presence in person or by proxy of the holders of a majority
of the outstanding Common Shares shall be required to constitute a quorum for
the election by such class of the remaining directors; provided, however, that
the holders of a majority of either such class of stock who are present in
person or by proxy shall have power to adjourn such meeting for the election of
directors by such class from time to time without notice other than announcement
at the meeting. No delay or failure by the holders of either of such classes of
stock to elect the members of the Board of Directors whom such holders are
entitled to elect shall invalidate the election of the remaining members of the
Board of Directors by the holders of the other such class of stock.

         If, during any interval between annual meetings of shareholders for the
election of directors and while the holders of Series C Preferred Shares shall
be entitled to elect the Default Directors, the number of directors in office
who have been elected by the holders of Series C Preferred Shares or Common
Shares and the series of Preferred Shares other than the Series C Preferred
Shares, as the case may be, shall, by reason of resignation, death or removal,
be less than the total number of directors subject to election by the holders of
shares of such class, the vacancy or vacancies in the directors elected by the
holders of Common Shares and the series of Preferred Shares other than the
Series C Preferred Shares, shall be filled by a majority vote of the remaining
directors then in office who were elected by the holders of Common Shares and
series of Preferred Shares other than the Series C Preferred Shares or succeeded
a director so elected, although such majority be less than a quorum, and the
vacancy in the directors elected by the holders of Series C Preferred Shares
shall be filled by a majority vote of the remaining directors then in office who
were elected by the holders of Series C Preferred Shares or succeeded a director
so elected, although such majority may be less than a quorum.

         (4) NOTICE OF CERTAIN EVENTS. In case any time:

                  (a) this corporation shall pay any dividend payable in stock
         upon Common Shares or Series B Preferred Shares, or make any
         distribution (other than regular cash dividends) to the holders of
         Common Shares or Series B Preferred Shares; or

                   (b) this corporation shall offer for subscription pro rata to
         the holders of Common Shares or Series B Preferred Shares any
         additional shares of stock of any class or other rights; or

                  (c) there shall be any capital reorganization,
         reclassification of the capital stock of this corporation, or
         consolidation or merger of this corporation with, or sale of all or
         substantially all of its assets, to another corporation; provided,
         however, that this provision shall not be applicable to the merger or
         consolidation of this corporation with or into another corporation if,
         following such merger or consolidation, the shareholders of this
         corporation immediately prior to such merger or consolidation own at
         least 80% of the equity of the combined entity; or

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<PAGE>
                  (d) there shall be a voluntary or involuntary dissolution,
         liquidation or winding up of this corporation;

         then, in any one or more of said cases, this corporation shall give
         written notice, by first-class mail, postage prepaid, addressed to the
         holders of Series C Preferred Shares at the addresses of such holders
         as shown on the books of this corporation, of the date on which (i) the
         books of this corporation shall close or a record shall be taken for
         such dividend, distribution or subscription rights, or (ii) such
         reorganization, reclassification, consolidation, merger, sale,
         dissolution, liquidation or winding up shall take place, as the case
         may be. Such notice shall also specify the date as of which the holders
         of Common Shares of record shall participate in such dividend,
         distribution or subscription rights, or shall be entitled to exchange
         their Common Shares for securities or other property deliverable upon
         such reorganization, reclassification, consolidation, merger, sale,
         dissolution, liquidation or winding up, as the case may be. Such
         written notice shall be given at least 20 days prior to the action in
         question and not less than 20 days prior to the record date or the date
         on which this corporation's transfer books are closed in respect
         thereto.

         (5) REDEMPTION RIGHTS.

                  (a) OPTIONAL REDEMPTION. This corporation shall have the
         right, but not the obligation, to purchase and redeem all, or any
         portion, of the then outstanding Series C Preferred Shares at a price
         per Series C Preferred Share equal to the Base Liquidation Preference
         plus accrued and unpaid dividends thereon (the "the Redemption Price"),
         if the exercise of such redemption option is approved by a majority of
         the members of this corporation's Board of Directors. With respect to
         each optional redemption, the corporation may not redeem a number of
         shares having an aggregate Base Liquidation Preference of less than the
         lesser of (i) One Hundred Thousand and no/100 Dollars ($100,000); or
         (ii) the aggregate Base Liquidation Preference of all Series C
         Preferred Shares then outstanding.

                  (b) NOTICE OF REDEMPTION. Except as otherwise provided herein,
         the corporation shall mail written notice of each redemption of any
         Series C Preferred Shares to each record holder thereof not more than
         90 nor less than 60 days prior to the date on fixed for redemption (the
         "Redemption Date"). Such notice shall include the date for redemption
         and the number of Series C Preferred Shares held by such holder to be
         redeemed.

                  (c) METHOD OF PAYMENT OF REDEMPTION PRICE. This corporation
         shall complete the redemption of any Series C Preferred Shares by
         mailing to the registered holders thereof, on the Redemption Date, an
         amount in cash out of moneys legally available therefor sufficient to
         redeem the Series C Preferred Shares held by each such holder, at the
         Redemption Price, upon surrender by such holders of the certificates

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<PAGE>

         evidencing the shares being redeemed, which certificates shall be
         properly endorsed in blank. In case fewer than the total number of
         Series C Preferred Shares represented by any certificate are to be
         redeemed, a new certificate representing the number of unredeemed
         Series C Preferred Shares shall be issued to the holder thereof without
         cost to such holder within five (5) business days after surrender of
         the certificate representing the redeemed Series C Preferred Shares.
         All rights with respect to such Series C Preferred Shares called for
         redemption shall cease and terminate on the Redemption Date, except
         only the right of the holders to receive the Redemption Price without
         interest upon surrender of their certificates therefor. All Series C
         Preferred Shares which are in any manner redeemed or acquired by this
         corporation shall be retired and cancelled and none of such shares
         shall be reissued.

                  If the funds of the corporation legally available for
         redemption of Series C Preferred Shares on any applicable Redemption
         Date are insufficient to redeem the total number of Series C Preferred
         Shares called for redemption, those funds which are legally available
         shall be used to redeem the maximum possible number of Series C
         Preferred Shares called for redemption pro rata among the holders of
         the Series C Preferred Shares. At any time after such redemption that
         additional funds of the corporation become legally available for the
         redemption of Series C Preferred Shares, such funds shall immediately
         be used to redeem any Series C Preferred Shares theretofore called for
         redemption pro rata among the holders of the Series C Preferred Shares.

                  (d) DETERMINATION OF THE NUMBER OF EACH HOLDER'S PREFERRED
         SHARES TO BE REDEEMED. The number of shares of Series C Preferred
         Shares to be redeemed from each holder thereof in redemptions under
         subsection 2(C)(5)(a) hereunder of less than all of the Series C
         Preferred Shares shall be the number of shares determined by
         multiplying the total number of Series C Preferred Shares to be
         redeemed by a fraction, the numerator of which shall be the total
         number of Series C Preferred Shares then held by such holder and the
         denominator of which shall be the total number of Series C Preferred
         Shares then outstanding.

                  (e) DIVIDENDS AFTER REDEMPTION. No Series C Preferred Share
         redeemed pursuant to this Section 5 shall be entitled to any dividends
         accruing after the Redemption Date with respect to Series C Preferred
         Shares called for redemption. On such date, all rights of the holder of
         such Series C Preferred Share shall cease (except the right to receive
         payment in accordance with subsection 2(C)(5)(c)), and such Series C
         Preferred Share shall no longer be deemed to be issued and outstanding.

                  (f) OTHER REDEMPTIONS OR ACQUISITIONS. The corporation shall
         not, nor shall it permit any Subsidiary to, redeem or otherwise acquire
         any Preferred Shares, except as expressly authorized herein or pursuant
         to a purchase offer made pro rata to all holders of Series C Preferred
         Shares on the basis of the number of Series C Preferred Shares owned by
         each such holder.



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<PAGE>

                  (g) CONVERSION PRIOR TO REDEMPTION. Upon the giving of a
         written notice from this corporation of a redemption, and prior to the
         date fixed by such notice for redemption of the Series C Preferred
         Shares, a holder of Series C Preferred Shares may elect to convert,
         prior to redemption, in accordance with Section 2(C)(6) hereof, all or
         a part of the number of Series C Preferred Shares fixed by the notice
         for redemption from such holder. In such event, the number of Series C
         Preferred Shares to be redeemed from such holder shall be reduced by
         the number of shares that the holder of such Series C Preferred Shares
         shall have elected to convert prior to redemption.

                  (h) ISSUANCE OF COMMON STOCK PURCHASE WARRANTS UPON FAILURE TO
         REDEEM.

                           (i) If this corporation shall not have redeemed, by
                  the close of business on January 15, 2005, Series C Preferred
                  Shares (including as shares redeemed, Series C Preferred
                  Shares converted by the holder prior to such date), having an
                  aggregate Base Liquidation Preference of not less than
                  $500,000, this corporation shall issue to each holder of the
                  Series C Preferred Shares, a warrant to acquire Common Shares
                  of the corporation, in substantially the form of the warrant
                  issued pursuant to the Investment Agreement, for the purchase
                  of a number of Common Shares equal to (xx) the aggregate Base
                  Liquidation Preference of all Series C Preferred Shares
                  outstanding as of January 15, 2005, less 500,000; multiplied
                  by (yy) 0.85 (adjusted proportionately to account for stock
                  splits, stock dividends, recapitalizations and other similar
                  events); which amount shall then be multiplied by (zz) a
                  fraction, the numerator of which is the total number of Series
                  C Preferred Shares held as of January 15, 2005, by the holder
                  to whom such warrant will be issued, and the denominator of
                  which is the aggregate number of outstanding Series C
                  Preferred Shares as of January 15, 2005.

                           (ii) If this corporation shall not have redeemed,
                  between January 16, 2005 and the close of business on January
                  15, 2006, Series C Preferred Shares (including as shares
                  redeemed, Series C Preferred Shares converted by the holder
                  during such period), having an aggregate Base Liquidation
                  Preference of the lesser of (x) $500,000, or (y) the aggregate
                  base Liquidation Preference of all Series C Preferred Shares
                  immediately following the close of business on January 15,
                  2005, this corporation shall issue to each holder of the
                  Series C Preferred Shares, a warrant to acquire Common Shares
                  of the corporation, in substantially the form of the warrant
                  issued pursuant to the Investment Agreement, for the purchase
                  of a number of Common Shares equal to (xx) the lesser of (aa)
                  $500,000, or (bb) the aggregate base Liquidation Preference of
                  all Series C Preferred Shares outstanding as of January 15,
                  2006; multiplied by (yy) 0.85 (adjusted proportionately to
                  account for stock splits, stock dividends, recapitalizations
                  and other similar events); which amount shall then be
                  multiplied by (zz) a fraction, the numerator of which is the
                  total number of Series C Preferred Shares held as of January
                  15, 2006, by the holder to whom such warrant will be issued,
                  and the denominator of which is the aggregate number of
                  outstanding Series C Preferred Shares as of January 15, 2006.


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<PAGE>

                           (iii) The initial exercise price per Common Share
                  with respect to the warrants issued pursuant to this Section
                  2(C)(5)(h) shall be One Cent ($.01).

         6. CONVERSION RIGHTS.

                  (a) OPTIONAL CONVERSION. Each Preferred Share shall be
         convertible at the option of the holder thereof into Common Shares of
         this corporation in accordance with the provisions and subject to the
         adjustments provided for in subsection 2(C)(6)(c). In order to exercise
         the conversion privilege, a holder of Preferred Shares shall surrender
         the certificate evidencing such Preferred Shares to this corporation at
         its principal office, duly endorsed to this corporation and accompanied
         by written notice to this corporation that the holder elects to convert
         a specified portion or all of such shares. Preferred Shares converted
         at the option of the holder shall be deemed to have been converted on
         the day of surrender of the certificate representing such shares for
         conversion in accordance with the foregoing provisions, and at such
         time the rights of the holder of such Preferred Shares, as such holder,
         shall cease and such holder shall be treated for all purposes as the
         record holder of Common Shares issuable upon conversion. As promptly as
         practicable on or after the conversion date, this corporation shall
         issue and mail or deliver to such holder a certificate or certificates
         for the number of Common Shares issuable upon conversion, computed to
         the nearest one hundredth of a full share, and a certificate or
         certificates for the balance of Preferred Shares surrendered, if any,
         not so converted into Common Shares.

                           With respect to any fraction of a Common Share
         resulting from the conversion of Series C Preferred Shares, this
         corporation shall not be required to issue a certificate for a
         fractional share, but shall instead pay to the holder of such
         fractional share, cash, equal to such fraction, multiplied by the then
         current fair market value for a Common Share, as determined by the
         Board of Directors of this corporation, acting in good faith.

                  (b) CONVERSION PRICE AND ADJUSTMENTS. The number of Common
         Shares issuable in exchange for each of the Preferred Shares upon
         conversion shall be equal to the Base Liquidation Preference, divided
         by the conversion price then in effect (the "Conversion Price"). The
         Conversion Price shall initially be $1.50, but shall be subject to
         adjustment from time to time as hereinafter provided:

                            (i) In case this corporation shall at any time
                  subdivide or split its outstanding Common Shares into a
                  greater number of shares or declare any dividend payable in
                  Common Shares, the Conversion Price in effect immediately
                  prior to such subdivision, split or dividend shall be
                  proportionately decreased, and conversely, in case the
                  outstanding Common Shares of this corporation shall be
                  combined into a smaller number of shares, the Conversion Price
                  in effect immediately prior to such combination shall be
                  proportionately increased.


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<PAGE>

                           (ii) Except for (x) pursuant to options to purchase
                  common stock of the Company granted to employees or directors
                  of the Company, approved by its Board of Directors or a
                  committee thereof, and having an exercise price per share not
                  less than eighty percent (80%) of the fair market value of a
                  share of Common Stock as of the date granted (provided that
                  the "fair market value" used for the purpose of such
                  determination is not less than the average closing "bid" and
                  "ask" prices for the Common Stock of the Company on a
                  registered securities exchange (if available), for the thirty
                  (30) trading days immediately preceding such determination),
                  or (y) as consideration for the acquisition by the Company of
                  the stock, or all or substantially all of the assets of
                  another entity or business, if, in such transaction the value
                  placed on the Common Shares is determined by the Board of
                  Directors, acting in good faith, to be equal to or in excess
                  of what is then the fair market value of a Common Share, (the
                  "Excluded Issuances"), if at any time, this corporation shall
                  issue or sell any Common Shares for a consideration per share
                  less than92/100 Dollars ($0.92) (the "Trigger Price") (other
                  than dividends payable in Common Shares) or shall issue any
                  options, warrants or other rights for the purchase of such
                  shares at a consideration per share of less than the Trigger
                  Price, then, upon such issuance or sale of such shares,
                  options, warrants or other purchase rights, the Conversion
                  Price in effect immediately prior to such issuance or sale for
                  the Preferred Shares shall be reduced to the price at which
                  such Common Shares were sold or at which Common Shares are
                  issuable upon the exercise of such options, warrants or other
                  purchase rights. If any options or purchase rights that are
                  taken into account in any such adjustment of the Conversion
                  Price subsequently expire without exercise, the Conversion
                  Price shall be recomputed at the time of expiration by
                  deleting such options or purchase rights. If the Conversion
                  Price is adjusted as the result of the issuance of any
                  options, warrants or other purchase rights, no further
                  adjustment of the Conversion Price shall be made at the time
                  of the exercise of such options, warrants or other purchase
                  rights.

                            (iii) Except for Excluded Issuances, if at any time
                  this corporation shall issue or sell any Common Shares for a
                  consideration per share less than the Trigger Price (other
                  than dividends payable in Common Shares), or shall issue any
                  options, warrants or other rights for the purchase of such
                  shares at a consideration per share of less than the Trigger
                  Price, the Conversion Price in effect immediately prior to
                  such issuance or sale shall be adjusted and shall be equal to
                  (x) the Conversion Price then in effect, multiplied by (y) a
                  fraction, the numerator of which shall be an amount equal to
                  the sum of (a) the number of Common Shares outstanding
                  immediately prior to such issuance or sale multiplied by the
                  Conversion Price then in effect, and (b) the total
                  consideration payable to this corporation upon such issuance
                  or sale of such shares and such purchase rights and upon the
                  exercise of such purchase rights, and the denominator of which

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<PAGE>

                  shall be the amount determined by multiplying (aa) the number
                  of Common Shares outstanding immediately after such issuance
                  or sale plus the number of the Common Shares issuable upon the
                  exercise of any purchase rights thus issued, by (bb) the
                  Conversion Price then in effect. If any options or purchase
                  rights that are taken into account in any such adjustment of
                  the Conversion Price subsequently expire without exercise, the
                  Conversion Price shall be recomputed by deleting such options
                  or purchase rights. If the Conversion Price is adjusted as the
                  result of the issuance of any options, warrants or other
                  purchase rights, no further adjustment of the Conversion Price
                  shall be made at the time of the exercise of such options,
                  warrants or other purchase rights.

                           (iv) The anti-dilution provisions of this subsection
                  2(C)(6)(b) may be waived by the affirmative vote of the
                  holders (acting together as a class) of at least ninety
                  percent (90%) of the then outstanding Preferred Shares.

                  (c) NOTICE OF CONVERSION PRICE ADJUSTMENT. Upon any adjustment
         of the Conversion Price, then and in each such case the corporation
         shall give written notice thereof, by first-class mail, postage
         prepaid, addressed to the registered holders of the Series C Preferred
         Shares at the addresses of such holders as shown on the books of this
         corporation, which notice shall state the Conversion Price resulting
         from such adjustment and the increase or decrease, if any, in the
         number of shares receivable at such price upon the conversion of Series
         C Preferred Shares, setting forth in reasonable detail the method of
         calculation and the facts upon which such calculation is based.

                  (d) ADJUSTMENT OF CONVERSION PRICE UPON EVENT OF DEFAULT UNDER
         INVESTMENT AGREEMENT. Upon the occurrence of an Event of Default, which
         Event of Default has remained uncured for a period of sixty (60) days
         after the date the holders of a majority of the Series C Preferred
         Shares shall give notice to the Company of such Event of Default, the
         Conversion Price shall thereupon be adjusted, and shall be equal to the
         Conversion Price in effect immediately prior to the occurrence of the
         Event of Default giving rise to the adjustment, divided by 2.

                  (e) DEFINITION OF COMMON SHARES. As used in subsections
         2(C)(6)(b)-(c) the term "Common Shares" shall mean and include this
         corporation's presently authorized Common Shares and shall also include
         any capital stock of any class of this corporation hereafter authorized
         which shall have the right to vote on all matters submitted to the
         shareholders of this corporation and shall not be limited to a fixed
         sum or percentage in respect of the rights of the holders thereof to
         participate in dividends or in the distribution of assets upon the
         voluntary or involuntary liquidation, dissolution or winding up of this
         corporation; provided that the shares receivable pursuant to conversion
         of Preferred Shares shall include shares designated as Common Shares of
         this corporation as of the date of issuance of such Preferred Shares,
         or, in case of any reclassification of the outstanding shares thereof,
         the stock, securities or assets provided for in subsection
         2(C)(6)(b)(ii) above.


                                      -12-
<PAGE>

SECTION 3.        ELIMINATION OF SERIES A PREFERRED STOCK.

         Pursuant to the authorization of this corporation's Board of Directors,
this corporation has designated 4,000,000 shares of Series A Preferred Shares,
of which only 1,000,000 shares were issued. Inasmuch as no shares of such
designation remain outstanding, the Board of Directors has adopted resolutions
setting forth elimination of such shares of Series A Preferred Stock, and in
accordance with such resolutions, the Articles of Incorporation of this
corporation are hereby amended. This corporation does not hereby eliminate
designations of its Series B Preferred Shares, Series B Participating Preferred
Shares or Series C Preferred Shares, nor its authority to issue additional
shares of preferred stock in accordance with its articles of incorporation. The
elimination and cancellation of the Series A Preferred Shares shall be deemed to
take place immediately prior to the designation and issuance of the Series C
Convertible Preferred Shares of this corporation.


                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK



                                      -13-
<PAGE>


                  SIGNATURE PAGE FOR CERTIFICATE OF DESIGNATION
                          FOR SERIES C PREFERRED STOCK


                  IN WITNESS WHEREOF, Bristol Retail Solutions, Inc. has caused
this Certificate of Designation of Rights and Preferences of Series C
Convertible Preferred Stock to be duly executed by its Chief Financial Officer
and attested to by its Assistant Secretary and has caused its corporate seal to
be affixed hereto this _______ day of January, 2000.


                                        BRISTOL RETAIL SOLUTIONS, INC.


                                        By:_____________________________________
                                                    Michael S. Shimada
                                                 Chief Financial Officer
(Corporate Seal)




ATTEST:


------------------------------------
         Assistant Secretary




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