Document:

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                         LINKING AND PROMOTION AGREEMENT

     This Agreement ("Agreement") dated as of March 10, 2000 (the "Effective
Date") is made by and between Colonial Direct Financial Group, Inc., a Delaware
corporation ("CDFG"), and Cavion Technologies, Inc., a Colorado corporation
("Cavion") (collectively, the "Parties" and individually a "Party").

                                   RECITALS

     A. CDFG is a financial services firm that maintains the CDFG Web SITE, as
defined below, at which it provides a variety of financial information and
services, including the CDFG Programs, also defined below.

     B. Cavion is a provider of various online banking and other services, which
offers its Clients and their Members, as defined below, these services for
inclusion on the Client Web Sites, also defined below.

     C. CDFG and Cavion desire to make the CDFG Programs available to Clients
and Members by means of hyperlink to the CDFG Web Site and other means.

                                  AGREEMENT

     NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the Par-ties hereto agree as follows:

1.   DEFINITIONS

     "AFFILIATE" means, with respect to either Party, any individual or entity
that, by virtue of a majority ownership interest, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with that Party.

     "CDFG PROGRAMS" means, the financial service programs described on
Attachment I to this Agreement.

     "CDFG WEB SITE" means, collectively, (i) the World Wide Web site identified
by the a URL mutually agree to by both parties, (ii) any prototypes or
demonstration versions of the CDFG Web Site, or any part thereof, (iii) any
successors, replacements, or other Web Sites that from time to time are
maintained by or for CDFG or any of its Affiliates provided that, both Parties
agree in writing that such successor, replacement, or other site will be
included as a "CDFG Web Site."

     "CAVION WEB SITE" means, collectively, (i) the World Wide Web site
identified by the URL < www.cavion.com >, (ii) a Client Web Site hosted by
Cavion on behalf of any Client, (iii) any prototypes or demonstration
versions of the Cavion Web Site, or any part thereof, (iv)

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any successors, replacements, or other Web Sites that from time to time are
maintained by or for Cavion or any of its Affiliates provided that, both Parties
agree in writing that such successor, replacement, or other site will be
included as a "Cavion Web Site."

     "CLIENT WEB SITE(S)" means, a Web site hosted by Cavion on behalf of a
Client.

     "CLIENT" means, any credit union or related banking institution with which
Cavion has, or develops in the future, a relationship.

     "CUSTOMER" means any Visitor or Member.

     "CUSTOMER DATA" means all data derived through Customer's use of or access
to the CDFG Programs.

     "INTELLECTUAL PROPERTY" means, any patent, copyright, trademark, trade
secret, trade dress, mask work, moral right, right of attribution or integrity
or other intellectual or industrial property rights or propriety rights arising
under the laws of any jurisdiction.

     "MARK" means, a Party's trade name and any trademarks, service marks,
logos, designs or other indicia of origin used by a Party and/or its Affiliates.

     "MEMBER(S)" means, any person or entity that belongs to, or is affiliated
with a Client.

     "PROMOTIONAL MATERIALS" means, promotions and other information displayed
on the Cavion Web Site, interstitials registration pages, statement stuffers,
statement messages, ad banners, newsletter copy, in-lobby displays and posters,
search engine placement, and other means mutually agreed upon by the Parties.

     "VISITOR(S)" means, any person or entity that is directed to the CDFG Web
Site(s) as a result of Cavion's efforts.

2.   SOLICITATION AND ENROLLMENT

     Beginning March 7, 2000, Cavion will market the CDFG Programs to Clients as
a service to be made available to Members on the Client Web Sites and on Search
Engine Portals at its sole cost and expense (except as provided in Section 3.
1), by means of the Promotional Materials.

3.   CDFG' RESPONSIBILITIES

     3.1 GENERAL. CDFG is responsible for all (i) costs associated with CDFG
Program development, customer service, administration, Promotional Materials
(except as provided in Section 4. 1), (ii) Client and/or Member billing/credits,
and (iii) all fulfillment.

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     3.2 GRANT OF LICENSE. CDFG grants to Cavion a limited, nonexclusive license
to create on the Cavion Web Site and the Client Web Sites a hypertext link
directed to a page on the CDFG Web Site that allows Members to access the CDFG
Programs. In addition, CDFG grants to Cavion a limited, nonexclusive license to
create on various search engine portals a hypertext link directed to a page on
the CDFG Web Site that allows Visitors to access the CDFG Programs. CDFG grants
to Cavion a nonexclusive license to use CDFG' proprietary Marks for the purpose
of linking to the CDFG Web Site. CDFG further grants to Cavion the right to
"frame," and the right to sublicense clients to "frame" with Client's Marks, the
CDFG Web Site. CDFG shall have the right, but not the obligation, to approve
each frame utilized by the Clients.

     3.3 PROMOTIONAL MATERIALS. CDFG shall provide Cavion, Clients, and/or
Members with Promotional Materials. After receiving Cavion's Promotional
Materials design (as provided in Section 4.1), CDFG shall use commercially
reasonable efforts to promptly prepare the Promotional Materials, but in no
event later than 30 days after receiving the Promotional Material design from
Cavion.

     3.4 CUSTOMER SERVICE. CDFG shall provide customer service to Clients and
Members in relation to the CDFG Programs. During tax season the call center is
manned 7xl6, and during other times of the year as appropriate.

     3.5 MEMBER LOAN ORIGINATION. CDFG agrees and covenants that it will not
consummate any loans or issue lines of credit to Members. Moreover, CDFG will
redirect Member loan request to the appropriate sponsoring Client.

     3.6 AD SERVING. CDFG will not display any ad banners, sponsor links or
other promotional displays ("Advertising") on the CDFG web site that links to
Cavion Web Sites without the written permission of Cavion. In the event that
CDFG does want to display Advertising on the CDFG site, CDFG will use Cavion's
Ad Server at a price to be determined.

     3.7 E-MAIL. CDFG will not send any e-mail to a Member that contains a
promotion or advertisement for a product or service that competes with the
products and services available at the Cavion Web Site, Client Web Sites, or the
Member Emporium.

     3.8 COMPETITIVE ADVERTISING. CDFG shall not display any Advertising or any
other promotion of a service or product that competes with the products or
services available at the Cavion Web Site, Client Web Sites, or the Member
Emporium.

     3.9 CUSTOMER PRIVACY. CDFG will post and adhere to a privacy policy that is
substantively similar to that of Member Emporium, which can be found at
http://info.memberemporium.com/empPolicy.html. CDFG is permitted to store and
house the data as needed for internal use.

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     3.10 USAGE OF CUSTOMER Data. CDFG will not sell, rent, license otherwise
disseminate Customer Data to any third-party. CDFG will provide Cavion with
Customer Data in an electronic form as mutually agreed.

4.   CAVION'S RESPONSIBILITIES

     4.1 DESIGN OF PROMOTIONAL MATERIALS. Cavion, at its cost, shall develop the
design and wording that will appear in the Promotional Materials, subject to
CDFG's approval, which shall not unreasonably be withheld.

     4.2 CURRENT PROMOTIONAL MATERIALS. Cavion shall use commercially reasonable
efforts to ensure that the Cavion Web Site contains current Promotional
Materials as submitted to Cavion by CDFG.

     4.3 SECURITY. Cavion shall encrypt and send to CDFG all information that is
necessary and required to be transmitted from the Client Web Sites to the CDFG
Web Site for the operation of the CDFG Programs in a mutually agreed upon secure
file format.

5.   PAYMENT TERMS

     The payment terms are set forth in Attachment II.

6.   REPRESENTATIONS AND WARRANTIES

     6.1 Each Party represents and warrants that (i) the making of this
Agreement does not violate any law, regulation or agreement to which it is a
party and that it has the authority to enter into this Agreement and to perform
its obligations hereunder; (ii) it has the sole and exclusive right to grant the
rights and licenses contemplated by this Agreement, without the need for any
licenses, releases, consents, approvals or immunities not yet granted; (iii) the
representations and warranties herein shall survive the expiration and/or
termination of this Agreement.

     6.2 CDFG represents and warrants that the CDFG Program does now or will in
the future infringe upon or violate any (i) Intellectual Property right or other
proprietary right of any third party or (ii) applicable law, regulation, or
nonproprietary third-party right.

7.   TERM AND TERMINATION

     7.1 TERM. This Agreement shall remain in effect for a period of twenty four
(24) months from the Effective Date (the "Initial Term"). Thereafter, this
Agreement will automatically renew for additional consecutive one (1) year terms
("Renewal Terms") unless written notice of intent to terminate is given to
either Party by the other Party 90 days prior to expiration of the then current
Term. The Term of this Agreement includes the Initial Term and any Renewal
Terms. Either party can terminate this agreement upon 180 days written notice.

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     7.2 TERMINATION FOR CAUSE. Notwithstanding anything else to the contrary in
this Agreement, if at any time during the term of this Agreement, either Party
materially breaches its respective obligations or responsibilities to the other
pursuant to this Agreement, the non-breaching Party may deliver to the breaching
Party written notice of its intent to terminate this Agreement setting forth the
nature of the breach. Termination will be effective 30 days after acknowledged
delivery of such termination notice to the breaching Party unless the breach is
cured within such 30-day period.

     7.3 CLIENT TERMINATION OF CDFG PROGRAM. CDFG understands and acknowledges
that a Client may terminate participation in the CDFG Programs at any time in
their sole discretion. If a Client terminates such participation, Cavion agrees
to work with such Client to ensure that they notify any Members who are
currently using the CDFG program regarding how such Member may continue using
the CDFG Program other than through the Client Web Site.

8.   INDEMNIFICATION

     8.1 INDEMNIFICATION BY CDFG. CDFG will hold harmless, defend and indemnify
Cavion and its Affiliates (and their respective employees, directors and
representatives) against any and all claims, actions, proceedings, suits,
liabilities, damages, settlements, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' fees and other litigation
expenses) incurred by Cavion, arising out of or relating to the violation of
third party Intellectual Property rights, applicable law, regulation or
non-proprietary right by the CDFG Programs or the CDFG Web Site. The payment by
CDFG of any indemnified loss described herein is subject to Cavion's compliance
with the procedures described in Section 8.3.

     8.2 INDEMNIFICATION BY CAVION. Cavion will hold harmless, defend and
indemnify CDFG and its Affiliates (and their respective employees, directors and
representatives) against any and all claims, actions, proceedings, suits,
liabilities, damages, settlements, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' fees and other litigation
expenses) incurred by CDFG, arising out of or relating to the violation of third
party Intellectual Property rights, applicable law, regulation or
non-proprietary night by the CDFG Web Site. The payment by Cavion of any
indemnified loss described herein is subject to CDFG's compliance with the
procedures described in Section 8.3.

     8.3 NOTICE AND PARTICIPATION. In connection with any claim or action
described in this Section 8.3, the party seeking indemnification (i) will give
the indemnifying party prompt written notice of the claim, (ii) will cooperate
with the indemnifying party (at the indemnifying party's expense) in connection
with the defense and settlement of the claim, and (iii) will permit the
indemnifying party to control the defense and settlement of the claim, provided
that the indemnifying party may not settle the claim without the indemnifying
party's prior written consent (which will not be unreasonably withheld).
Further, the indemnified party (at its cost) may participate in the defense and
settlement of the claim.

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     8.4 LIMITATIONS. Neither party will indemnify the other for lost profits or
consequential damages arising out of or in any way connected with this
agreement. In addition, neither party is guaranteeing the other a minimum level
of business as a result of the relationship described by this Agreement.

9.   INTELLECTUAL PROPERTY

     9.1 USE. Except as provided in this Agreement, neither Party shall use any
of the other Party's Intellectual Property without the prior written consent of
the other Party. It is expressly understood by each Party that Intellectual
Property is proprietary to the owning Party and that nothing in this Agreement
constitutes the grant of a general license for one Party to use the Intellectual
Property of the other Party.

     9.2 TERMINATION. Upon termination of this Agreement, any and all rights or
privileges of either Party to use the other Party's Intellectual Property shall
expire, and each Party shall discontinue the use of the other's Intellectual
Property in connection with any business conducted unless otherwise provided for
in writing and signed by authorized representatives of both parties.

10.  TRANSFERABILITY

     This Agreement may be not be assigned by either Party, in whole or in part
without the prior written consent of the other Party, unless to (i) an Affiliate
or (ii) a third party which acquires all or substantially all of such Party's
assets and has the capability to perform all of the obligations of the assigning
Party under the terms and conditions of this Agreement. A permitted assignment
by a Party hereunder will not relieve such Party from its obligations under the
terms of this Agreement.

11.  LIMITATION OF LIABILITY

     NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY (OR TO ANY PERSON CLAIMING
RIGHTS DERIVED FROM THE OTHER PARTY'S RIGHTS) FOR INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES OF ANY KIND, INCLUDING
LOST PROFITS, LOSS OF BUSINESS, OR OTHER ECONOMIC DAMAGE, AS A RESULT OF BREACH
OF ANY WARRANTY OR OTHER TERM OF THIS AGREEMENT, REGARDLESS OF WHETHER THE PARTY
ALLEGEDLY LIABLE WAS ADVISED, HAD REASON TO KNOW, OR IN FACT KNEW OF THE
POSSIBILITY THEREOF.

12.  ARBITRATION

     Any dispute arising out of or relating to this Agreement, including any
issues relating to arbitrability or the scope of this arbitration clause, will
be finally settled by arbitration by a panel of 3 arbitrators in the accordance
with the rules of the American Arbitration Association

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and the United States Arbitration Act. Judgment upon the award rendered by the
arbitrators may be entered by any court with jurisdiction.

13.  EXCLUSIVITY

     13.1 CDFG GRANT. During the term of this Agreement or so long as CDFG is
receiving revenue as a result of the marketing of the CDFG Programs, neither
CDFG nor any of its Affiliates or subsidiaries shall create, purchase, market,
administer, or enter into an agreement with another party, written or unwritten,
permitting such other party to market, offer, sell, or otherwise make the CDFG
Programs available to credit unions, related financial institutions, or their
customers.

     13.2 CAVION GRANT. During the term of this Agreement or so long as Cavion
is receiving revenue as a result of the marketing of the CDFG Programs, Cavion
shall not market or solicit any like service or program to any then existing
Client enrolled in the CDFG Program.

     13.3 Under the terms of this Agreement, and pursuant to the Parties'
express intent, CDFG exclusivity with Cavion will be superseded in the event an
individual credit union has entered into, whether prior or subsequent to the
execution of this Agreement, any other services arrangement similar to CDFG
Programs.

     (a) In such event, such a credit union or credit unions may elect to
     feature CDFG services, in addition to any other services provider, but
     Cavion is under no obligation to take any action on behalf of CDFG
     respecting an individual credit union's decision whether or not to feature
     CDFG's Programs in addition to the services of any other provider of
     comparable services with whom the credit union has a relationship. In the
     event a credit union elects not to feature the CDFG Programs, the
     respective obligations of each of the Parties to this Agreement shall not
     be altered but shall remain fully in place and enforceable by either Party.
     Notwithstanding the foregoing, CDFG Programs may still be offered to the
     credit union as an alternative source.

14.  CONFIDENTIALITY

     In performing its obligations pursuant to this Agreement, each Party hereto
(the "Disclosing Party") may disclose to the other Party ("Receiving Party")
information in connection with the performance of this Agreement, including
without limitation, the Disclosing Party's business, products, services,
formats, computer programs, policies, procedures, methods, technical
developments, trade secrets, financial results, formulas, marketing research and
development methods, marketing statistics, product development plans, membership
solicitation methods, strategies, research data and Customer Data. All such
information about the Disclosing Party shall be deemed "Confidential
Information." The parties shall use the Confidential Information of the other
Party solely to perform this Agreement, and all Confidential Information shall
remain the sole property of the Disclosing

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Party. Information shall not be deemed Confidential Information if it: (i) is
now or hereafter becomes, through no act or omission on the part of the
receiving Party, generally known or available within the industry, or is now or
later enters the public domain through no act or omission on the part of the
receiving Party; (ii) was acquired by the receiving Party before receiving such
information from the disclosing Party and without restriction as to use or
disclosure; (iii) is hereafter rightfully furnished to the receiving Party by a
third party, without restriction as to use or disclosure; (iv) is information
which the receiving Party can document was independently developed by the
receiving Party; (v) is required to be disclosed pursuant to law, provided the
receiving Party uses reasonable efforts to give the disclosing Party reasonable
notice of such required disclosure, and cooperates in any attempts by the
disclosing Party to obtain a protective order or other similar protection
against disclosure of the Confidential Information; or (vi) is disclosed with
the prior written consent of the disclosing Party. Each of the parties shall use
the same care as it uses to maintain the confidentiality of its most
confidential information, which in no event shall be less than reasonable care.
The parties acknowledge that the remedy at law for any breach or threatened
breach of the provisions of this Section shall be inadequate, and that the
non-breaching Party, in addition to any other remedy available to it, shall be
entitled to obtain injunctive relief without proof of irreparable injury without
posting bond.

15.  GENERAL

     15.1 ENTIRE AGREEMENT. This Agreement and Exhibits hereto constitutes the
entire agreement between the parties and may only be amended in a written
document signed by the parties.

     15.2 WAIVERS. The failure of either Party to insist upon or enforce strict
performance by the other Party of any provision of this Agreement or to exercise
any right under this Agreement shall not be construed as a waiver or
relinquishment to any extent of such Party's right to assert or rely upon any
such provision or right in that or any other instance.

     15.3 PRIVATE LABELING. Except as provided by this Agreement, nothing herein
shall be construed to be a grant of a right or license to Cavion to re-market or
private label any of the CDFG Programs to any third party.

     15.4 SEVERABILITY. If any part of this Agreement shall be held to be
unenforceable, the remainder of this Agreement will nevertheless remain in full
force and effect.

     15.5 FORCE MAJEURE. Neither Party shall be deemed in default or otherwise
liable for any delay in or failure of performance under this Agreement by reason
of any act of God, fire, natural disaster, accident, riot, act of government,
failure of transportation or communication or supplies of goods and services
which by the exercise of reasonable diligence, said Party is unable to prevent.
The happening of such "Force Majeure" shall extend the time of performance on
the part of the Party hereto affected thereby, to such extent as may be
necessary to enable it to complete performance after the cause or causes of
delay or failure

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have been removed, except that if performance cannot be resumed within 30 days,
either Party may terminate this Agreement.

     15.6 HEADINGS. The headings in this Agreement are used for convenience of
reference and shall not be deemed to modify or affect the interpretation of this
Agreement.

     15.7 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed in
separate counterparts, each of which shall be deemed an original, and all of
which shall be deemed one and the same instrument. A facsimile transmission of
this signed Agreement bearing a signature on behalf of a Party hereto shall be
legal and binding on such Party.

     15.8 PUBLIC ANNOUNCEMENT. No press release, public announcement,
confirmation or other information regarding this Agreement or the contents
hereof or thereof shall be made by any Party without the prior written consent
of the other Party, which consent shall not be unreasonably withheld. It is
agreed and understood that the parties shall work together to prepare any such
press release or public announcement. The foregoing notwithstanding, if a Party
is required pursuant to applicable securities laws to make such Party has
furnished the other Party with the text of such public announcement or press
release sufficiently in advance of such public announcement or press release as
to afford the Receiving Party a reasonable opportunity to review such public
announcement or press release and such Party, to the extent consistent with its
legal disclosure obligations, modifies such public announcement or press release
as reasonably requested by the other Party. Notwithstanding the foregoing,
nothing contained herein shall prevent CDFG from filing this document and/or
describing its contents in any document required to be filed with any federal or
state securities regulatory body in connection with any offering of its
securities to the public and/or any document required to be otherwise
disseminated or distributed in connection therewith.

     15.9 GOVERNING LAW. This Agreement shall be subject to, governed by and
construed under the laws of the State of Colorado without giving effect to the
principles of conflict of laws.

     15.10 NOTICES. All notices which are or maybe required to be given by
either Party to the other under this Agreement shall be in writing and shall be
deemed to be properly given (a) when delivered personally, or (b) three (3)
business days after being sent by certified mail, return receipt requested,
first class postage pre-paid, or one day after being sent by a nationally
recognized overnight delivery service, to the address at the end of this
Agreement.

     15.11 SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure
to the benefit of the parties and their respective successors and permitted
assigns.

     15.12 ATTORNEYS' FEES. If any legal action is brought by either party
against the other regarding the subject matter of this Agreement, the prevailing
party shall be entitled to recover, in addition to any other relief, reasonable
attorneys' fees and expenses.

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     15.13 COOPERATION. Whenever and wherever provided herein, the parties agree
to take such reasonable steps to amicably address and resolve all matters and
concerns to prevent a dispute or inadvertent breach of either the spirit or
intent of this Agreement.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

COLONIAL DIRECT FINANCIAL                 CAVION TECHNOLOGIES, INC.
SERVICES, INC.

By:                                       By:
   ---------------------------------         ----------------------------------
Title:                                    Title:
      ------------------------------            -------------------------------

Address: 1499 W. Palmetto Park Rd.        Address:
         Boca Raton, FL 33486                     -----------------------------
Fax No.:                                  Fax No.:
        ----------------------------              -----------------------------
Attention:                                Attention:
          --------------------------                ---------------------------

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                                  ATTACHMENT I
                                  CDFG PROGRAMS

                               AS MUTUALLY AGREED

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                                  ATTACHMENT II
                                  PAYMENT TERMS

1.   Colonial will price the retail product as needed to offer a competitive
     product.

2.   For each paid and collected tax return, Cavion will get l5% of the retail
     price.

3.   Payment will be made 30 days after billed to the client, or as otherwise
     mutually agreed.

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                           CERTIFICATE OF DESIGNATION

                                       OF

                 SERIES E CUMULATIVE CONVERTIBLE PREFERRED STOCK
                                ($.001 par value)

                                       OF

                           VENTURI TECHNOLOGIES, INC.

     Venturi Technologies, Inc., a Nevada corporation (the "Corporation"),
pursuant to authority conferred on the Board of Directors of the Corporation by
its Articles of Incorporation, as amended, and in accordance with the provisions
of Section 78.1955 of the Nevada Revised Statutes ("NRS"), certifies that the
Board of Directors of the Corporation, at a meeting duly called and held
pursuant to the NRS, duly adopted the following resolution providing for the
establishment and issuance of a series of Preferred Stock to be designated as
"Series E Cumulative Convertible Preferred Stock" as follows:

     RESOLVED, that, pursuant to the authority expressly granted and vested in
the Board of Directors of this Corporation in accordance with the provisions of
its Articles of Incorporation, as amended, a series of the preferred stock of
the Corporation be and hereby is established, consisting of _____ shares, to be
designated as "Series E Cumulative Convertible Preferred Stock" (the "Preferred
Stock"); the Board of Directors be and hereby is authorized to issue such shares
of Preferred Stock from time to time and for such consideration and on such
terms as the Board of Directors shall determine; and subject to the limitations
provided by law and by the Articles of Incorporation, as amended, the powers,
designations, preferences and relative, participating, option or other special
rights of, and the qualifications, limitations or restrictions upon, the
Preferred Stock shall be as follows:

     Section 1. Definitions.

     "Common Stock" means, collectively, the Corporation's common stock, par
value $.001 per share.

     "Conversion Stock" means shares of the Corporation's Common Stock issued or
issuable upon conversion of the Preferred Stock, whether or not a share of
Preferred Stock is presently convertible; provided, that if there is a change
such that the securities issuable upon conversion of the Preferred Stock are
issued by an entity other than the Corporation or there is a change in the class
of securities so issuable, then the term "Conversion Stock" shall

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mean one share of the security issuable upon conversion of the Preferred Stock
if such security is issuable in shares, or shall mean the smallest unit in which
such security is issuable if such security is not issuable in shares.

     "Junior Securities" means any of the Corporation's Common Stock.

     "Liquidation Value" of any Share, as defined in Section 2A hereof, as of
any particular date shall be equal to $100.00.

     "Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.

     "Pari Passu Securities" means the outstanding shares of the Corporation's
Series A, Series B, Series C and Series D preferred stock.

     "Redemption Date" as to any Share means the date specified in the notice of
any redemption at the Corporation's option or the applicable date specified
herein in the case of any other redemption; provided that no such date shall be
a Redemption Date unless the Liquidation Value of such Share (plus all accrued
and unpaid dividends thereon) is actually paid in full on such date, and if not
so paid in full, the Redemption Date shall be the date on which such amount is
fully paid.

     Section 2. Dividends.

     2A. General Obligation. When and as declared by the Corporation's Board of
Directors and to the extent permitted under the NRS, the Corporation shall pay
preferential dividends in cash to the holders of the Preferred Stock as provided
in this Section. Except as otherwise provided herein, dividends on each share of
the Preferred Stock shall accrue, whether or not declared or paid, on a daily
basis at the rate of 6% per annum (computed on the basis of a year of 360 days
for the actual number of days elapsed) of the sum of the Liquidation Value
thereof plus all accrued and unpaid dividends thereon from and including the
date of issuance of such share of Preferred Stock to and including the first to
occur of (i) the date on which the Liquidation Value of such share of Preferred
Stock (plus all accrued and unpaid dividends thereon) is paid to the holder
thereof in connection with the liquidation of the Corporation or the Redemption
Price of such share of Preferred Stock (plus all accrued and unpaid dividends
thereon) is paid to the holder thereof in connection with the redemption of such
share of Preferred Stock by the Corporation, (ii) the date on which such share
of Preferred Stock is converted into shares of Conversion Stock hereunder, or
(iii) the date on which such share of Preferred Stock is otherwise acquired by
the Corporation. Such dividends shall accrue whether or not they have been
declared and whether or not there are profits, surplus or other funds of the
Corporation legally available for the payment of dividends. Such dividends shall
be cumulative such that all accrued and unpaid dividends shall be fully paid or
declared with funds irrevocably

<PAGE>

set apart for payment before any dividend, distribution or payment may be made
with respect to any Junior Securities. The Corporation shall not make any
dividend, distribution or payment with respect any Pari Passu Securities unless
a ratable amount is paid toward any accrued and unpaid dividends on the
Preferred Stock. The date on which the Corporation initially issues any share of
Preferred Stock shall be deemed to be its "date of issuance" regardless of the
number of times transfer of such share of Preferred Stock is made on the stock
records maintained by or for the Corporation and regardless of the number of
certificates which may be issued to evidence such share of Preferred Stock.

     2B. Dividend Reference Date. All dividends which have accrued on the
Preferred Stock shall be payable on March 1, June1, September 1 and December 1
of each year, beginning March 1, 2000 (collectively, the "Dividend Payment
Dates").

     2C. Distribution of Partial Dividend Payments. Except as otherwise provided
herein, if at any time the Corporation pays less than the total amount of
dividends then accrued with respect to the Preferred Stock, such payment shall
be distributed ratably among the holders thereof based upon the number of shares
of Preferred Stock held by each such holder.

     2D. Payment of Stock Dividends. Notwithstanding any other provision of this
Section 2, in the sole discretion of the holder, any dividends accruing on the
Preferred Stock may be paid in lieu of cash dividends by the issuance of
additional shares of Preferred Stock (including fractional shares) having an
aggregate Liquidation Value at the time of such payment equal to the amount of
the dividend to be paid; provided, that if the Corporation pays less than the
total amount of dividends then accrued on the Preferred Stock in the form of
additional shares, such payment in shares of Preferred Stock shall be made pro
rata among the holders of Preferred Stock based upon the aggregate accrued but
unpaid dividends on the Preferred Stock held by each such holder. If and when
any Preferred Stock is issued under this paragraph 2D for the payment of accrued
dividends, such Preferred Stock shall be deemed to be validly issued and
outstanding and fully paid and nonassessable.

     2E. Participating Dividends. In the event that the Corporation declares or
pays any dividends upon the Common Stock (whether payable in cash, securities or
other property) other than dividends payable solely in shares of Common Stock,
the Corporation shall also declare and pay to the holders of the Preferred Stock
at the same time that it declares and pays such dividends to the holders of the
Common Stock, the dividends which would have been declared and paid with respect
to the Common Stock issuable upon conversion of the Preferred Stock had all of
the outstanding Preferred Stock been converted immediately prior to the record
date for such dividend, or if no record date is fixed, the date as of which the
record holders of Common Stock entitled to such dividends are to be determined.

     Section 3. Liquidation.

     Upon any liquidation, dissolution or winding up of the Corporation (whether
voluntary

<PAGE>

or involuntary), each holder of Preferred Stock shall be entitled to be paid
ratably together with the Pari Passu Securities, before any distribution or
payment is made upon any Junior Securities, an amount in cash equal to the
aggregate Liquidation Value (plus all accrued and unpaid dividends) of all
shares of Preferred Stock held by such holder. If upon any such liquidation,
dissolution or winding up of the Corporation, the Corporation's assets to be
distributed among the holders of the Preferred Stock are insufficient to permit
payment to such holders of the aggregate amount which they are entitled to be
paid under this Section 3, then the entire assets available to be distributed
shall be distributed ratably among such holders based upon the aggregate
Liquidation Value (plus all accrued and unpaid dividends) of the Preferred Stock
held by each such holder. Prior to the liquidation, dissolution or winding up of
the Corporation, the Corporation shall declare for payment all accrued and
unpaid dividends with respect to the Preferred Stock, but only to the extent of
funds of the Corporation legally available for the payment of dividends. The
Corporation shall mail written notice of such liquidation, dissolution or
winding up, not less than 60 days prior to the payment date stated therein, to
each record holder of Preferred Stock. Neither the consolidation or merger of
the Corporation into or with any other entity or entities, nor the sale or
transfer by the Corporation of less than substantially all of its assets, nor
the reduction of the capital stock of the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation within the meaning of
this Section.

     Section 4. Priority of Preferred Stock on Dividends and Redemptions.

     4A. No Payments With Respect to Junior Securities. So long as any Preferred
Stock remains outstanding, without the prior written consent of the holders of
two-thirds of the outstanding shares of Preferred Stock, the Corporation shall
not, nor shall it permit any Subsidiary to, redeem, purchase or otherwise
acquire directly or indirectly any Junior Securities, nor shall the Corporation
directly or indirectly pay or declare any dividend or make any distribution upon
any Junior Securities. So long as any Preferred Stock remains outstanding,
without the prior written consent of the holders of two-thirds of the
outstanding shares of Preferred Stock, the Corporation shall not, nor shall it
permit any Subsidiary to, redeem, purchase or otherwise acquire directly or
indirectly any Pari Passu Securities, nor shall the Corporation directly or
indirectly pay or declare any dividend or make any distribution upon any Pari
Passu Securities, unless a ratable redemption, purchase, dividend or
distribution is made with respect to the Preferred Stock.

     4B. No Issuance of Senior or Pari Passu Securities. The Preferred Stock
shall be senior to or on a parity with all other series of capital stock or
other equity securities of the Corporation as to rights to dividends and
payments upon liquidation, redemption or otherwise. For so long as any Preferred
Stock remains outstanding, without the prior written consent of the holders of
two-thirds of the outstanding shares of the Preferred Stock, the Corporation
shall not amend its Articles of Incorporation or take any other action to
approve or issue any capital stock (including increasing the number of
authorized shares of Preferred Stock) of the Corporation that is senior or pari
passu in right to the payment of dividends, payment upon

<PAGE>

liquidation, redemption or otherwise to the Preferred Stock. Additionally, so
long as any Preferred Stock remains outstanding, without the prior written
consent of the holders of two-thirds of the outstanding shares of Preferred
Stock, the Corporation shall not amend its Articles of Incorporation or take any
other action that would alter the rights, preferences or privileges of the
Preferred Stock as in effect on the date of the original issuance of the
Preferred Stock.

     Section 5. Redemption.

     5A. Optional Redemptions. The Corporation may at any time redeem all or any
portion of Preferred Stock then outstanding. On any such redemption, the
Corporation shall pay a price per Share equal to 125% of the Liquidation Value
thereof, plus all accrued and unpaid dividends thereon, and all penalties which
have accrued with respect to any of the Preferred Stock under this Designation
and under the Purchase Agreement (the "Redemption Price"). On any such
redemption, all shares of Preferred Stock shall immediately become convertible
in full, notwithstanding any other provision of this Designation.

     5B. Redemption Payment. For each share of Preferred Stock which is to be
redeemed, the Corporation shall be obligated on the Redemption Date to pay to
the holder thereof (upon surrender by such holder at the Corporation's principal
office of the certificate representing such share of Preferred Stock) an amount
in immediately available funds equal to the Redemption Price of such share of
Preferred Stock. If the funds of the Corporation legally available for
redemption of Preferred Stock on any Redemption Date are insufficient to redeem
the total number of shares of Preferred Stock to be redeemed on such date, those
funds which are legally available shall be used to redeem the maximum possible
number of shares of Preferred Stock ratably among the holders of the Preferred
Stock to be redeemed based upon the aggregate Liquidation Value of Preferred
Stock (plus all accrued and unpaid dividends thereon) held by each such holder.
At any time thereafter when additional funds of the Corporation are legally
available for the redemption of Shares, such funds shall immediately be used to
redeem the balance of the Preferred Stock which the Corporation has become
obligated to redeem on any Redemption Date but which it has not redeemed. Prior
to any redemption of Preferred Stock, the Corporation shall declare for payment
all accrued and unpaid dividends with respect to the shares of Preferred Stock
which are to be redeemed, but only to the extent of funds of the Corporation
legally available for the payment of dividends.

     5C. Notice of Redemption. The Corporation shall mail written notice of each
redemption of any Preferred Stock to each record holder thereof not less than 30
days prior to the date on which such redemption is to be made. Irrespective of
mailing any notice of redemption which relates to a redemption at the
Corporation's option, the Corporation shall not become obligated to redeem the
total number of shares Preferred Stock specified in such notice at the time of
redemption specified therein if such notice contains conditions precedent which
must be satisfied prior to redemption. In case fewer than the total number of
shares of Preferred Stock represented by any certificate are redeemed, a new
certificate representing the number of unredeemed shares of Preferred Stock
shall be issued to the holder thereof without cost to such

<PAGE>

holder within ten (10) business days after surrender of the certificate
representing the redeemed shares of Preferred Stock.

     5D. Determination of the Number of Each Holder's Shares to be Redeemed.
Except as otherwise provided herein, the number of shares of Preferred Stock to
be redeemed from each holder thereof in redemptions hereunder shall be the
number of shares determined by multiplying the total number of shares of
Preferred Stock to be redeemed times a fraction, the numerator of which shall be
the total number of shares of Preferred Stock then held by such holder and the
denominator of which shall be the total number of shares of Preferred Stock then
outstanding.

     5E. Dividends After Redemption Date. No share of Preferred Stock is
entitled to any dividends accruing after the date on which the Redemption Price
is paid to the holder thereof. On such date all rights of the holder of such
share of Preferred Stock shall cease, and such share of Preferred Stock shall
not be deemed to be outstanding.

     5F. Redeemed or Otherwise Acquired Shares. Any Preferred Stock which are
redeemed or otherwise acquired by the Corporation shall be canceled, and shall
be deemed to be undesignated authorized and unissued preferred shares.

     5G. Other Redemptions or Acquisitions. The Corporation shall not redeem or
otherwise acquire any Preferred Stock, except as expressly authorized herein or
pursuant to a purchase offer made pro-rata to all holders of Preferred Stock on
the basis of the number of shares of Preferred Stock owned by each such holder.

     5H. Accrued Dividends Must be Paid Prior to Any Redemption. The Corporation
may not, under an optional redemption, redeem any Preferred Stock, unless all
dividends accrued on the outstanding Preferred Stock through the immediately
preceding Dividend Reference Date have been paid in full.

     Section 6. Voting Rights. The holders of the Preferred Stock shall be
entitled to notice of all stockholders' meetings, and except as otherwise
required by applicable law or set forth below, the holders of the Preferred
Stock shall be entitled to vote on all matters submitted to the stockholders for
a vote together with the holders of the Common Stock voting together as a single
class with each share of Common Stock entitled to one vote per share and each
share of Preferred Stock entitled to one vote for each share of Common Stock
issuable upon conversion of such share of Preferred Stock as of the record date
for such vote or, if no record date is specified, as of the date of such vote.

     Section 7. Conversion.

     7A. Conversion Procedure.

<PAGE>

          (i) During the time periods indicated in the table below, any holder
of Preferred Stock may convert up to that percentage of the Preferred Stock
indicated in the table below (including any fraction of a share) held by such
holder into a number of shares of Conversion Stock computed by dividing (A) the
product obtained by multiplying the number of Shares to be converted by $100
and, by (B) the Conversion Price then in effect:

<TABLE>
<S>                                                                                          <C>
On or after the date of this Certificate of Designation                                       25%
On or after the date which is 30 days after the date of this Certificate of Designation       50%
On or after the date which is 60 days after the date of this Certificate of Designation       75%
On or after the date which is 90 days after the date of this Certificate of Designation      100%
</TABLE>

          (ii) Each conversion of Preferred Stock shall be deemed to have been
effected as of the close of business on the date on which the certificate or
certificates representing the Preferred Stock to be converted have been
surrendered at the principal office of the Corporation. At such time as such
conversion has been effected, the rights of the holder of such Preferred Stock
as such holder shall cease and the Person or Persons in whose name or names any
certificate or certificates for shares of Conversion Stock are to be issued upon
such conversion shall be deemed to have become the holder or holders of record
of the shares of Conversion Stock represented thereby.

          (iii) The conversion rights of any Share subject to redemption
hereunder shall terminate on the Redemption Date for such Share unless the
Corporation has failed to pay to the holder thereof the Redemption Price.

          (iv) As soon as possible after a conversion has been effected (but in
any event within two (2) business days in the case of subparagraph (a) below),
the Corporation shall deliver to the converting holder:

          (a) a certificate or certificates representing the number of shares of
     Conversion Stock issuable by reason of such conversion in such name or
     names and such denomination or denominations as the converting holder has
     specified;

          (b) payment in an amount equal to all accrued dividends with respect
     to each Share converted, which have not been paid prior thereto, provided,
     however, that such accrued dividends may, at the holder's option, be
     converted into an additional number of shares of Conversion Stock by
     dividing the amount of unpaid dividends by the Conversion Price; and

          (c) a certificate representing any shares of Preferred Stock which
     were represented by the certificate or certificates delivered to the
     Corporation in connection with such conversion but which were not
     converted.

          (v) If the Corporation is not permitted under applicable law to pay
any portion

<PAGE>

of the accrued dividends on the Preferred Stock being converted, the Corporation
may (i) pay such dividends to the converting holder as soon thereafter as funds
of the Corporation are legally available for such payment or (ii) such portion
of the unpaid dividends may, at the Corporation's option, be converted into an
additional number of shares of Conversion Stock determined by dividing the
amount of the unpaid dividends to be applied for such purpose, by the Conversion
Price.

          (vi) Upon conversion of each Share of Preferred Stock, the Corporation
shall take all such actions as are necessary in order to insure that the
Conversion Stock issuable with respect to such conversion shall be validly
issued, fully paid and nonassessable.

          (vii) The Corporation shall assist and cooperate with any holder of
Preferred Stock required to make any governmental filings or obtain any
governmental approval prior to or in connection with any conversion of Preferred
Stock hereunder (including, without limitation, making any filings required to
be made by the Corporation).

          (viii) If any fractional interest in a share of Conversion Stock
would, except for the provisions of this subparagraph, be deliverable upon any
conversion of the Preferred Stock, the Corporation, in lieu of delivering the
fractional share therefor, shall round such fraction to the nearest whole share.

          (ix) The Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Conversion Stock, solely for the
purpose of issuance upon the conversion of the Preferred Stock, such number of
shares of Conversion Stock issuable upon the conversion of all outstanding
Preferred Stock. All shares of Conversion Stock which are so issuable shall,
when issued, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges. The Corporation shall take all such actions
as may be necessary to assure that all such shares of Conversion Stock may be so
issued without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which shares of Conversion
Stock may be listed (except for official notice of issuance which shall be
immediately delivered by the Corporation upon each such issuance).

          (x) If the shares of Conversion Stock issuable by reason of such
conversion of Preferred Stock are convertible into or exchangeable for any other
stock or securities of the Corporation, the Corporation shall, at the converting
holder's option, upon surrender of the Shares to be converted by such holder as
provided above together with any notice, statement or payment required to effect
such conversion or exchange of Conversion Stock, deliver to such holder or as
otherwise specified by such holder a certificate or certificates representing
the stock or securities into which the shares of Conversion Stock issuable by
reason of such conversion are so convertible or exchangeable, registered in such
name or names and in such denomination or denominations as such holder has
specified.

<PAGE>

     7B. Conversion Price. As used herein, the term "Conversion Price" shall
mean 80% of the the average of the three lowest daily bid prices for the
Preferred Stock quoted on the NASDAQ Stock Market System or other market or
system upon which reported or quoted during the 15 trading days preceding the
date as of which such Conversion Price is being determined.

     7C. Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under paragraph 7B, the following
shall be applicable:

          (i) Issuance of Rights or Options. If the Corporation in any manner
grants or sells any Options and the price per share for which Common Stock is
issuable upon the exercise of such Options, or upon conversion or exchange of
any Convertible Securities issuable upon exercise of such Options, is less than
the Conversion Price in effect immediately prior to the time of the granting or
sale of such Options, then the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange of the
total maximum amount of such Convertible Securities issuable upon the exercise
of such Options shall be deemed to be outstanding and to have been issued and
sold by the Corporation at the time of the granting or sale of such Options for
such price per share. For purposes of this paragraph, the "price per share for
which Common Stock is issuable" shall be determined by dividing (a) the total
amount, if any, received or receivable by the Corporation as consideration for
the granting or sale of such Options, plus the minimum aggregate amount of
additional consideration payable to the Corporation upon exercise of all such
Options, plus in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable to the Corporation upon the issuance or sale of such Convertible
Securities and the conversion or exchange thereof, by (b) the total maximum
number of shares of Common Stock issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities issuable upon
the exercise of such Options.

          (ii) Issuance of Convertible Securities. If the Corporation in any
manner issues or sells any Convertible Securities and the price per share for
which Common Stock is issuable upon conversion or exchange thereof is less than
the Conversion Price in effect immediately prior to the time of such issue or
sale, then the maximum number of shares of Common Stock issuable upon conversion
or exchange of such Convertible Securities shall be deemed to be outstanding and
to have been issued and sold by the Corporation at the time of the issuance or
sale of such Convertible Securities for such price per share. For the purposes
of this paragraph, the "price per share for which Common Stock is issuable"
shall be determined by dividing (a) the total amount received or receivable by
the Corporation as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Corporation upon the conversion or exchange thereof, by (b)
the total maximum number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment of the
Conversion Price

<PAGE>

shall be made when Common Stock is actually issued upon the conversion or
exchange of such Convertible Securities.

          (iii) Change in Option Price or Conversion Rate. If the purchase price
provided for in any Options, the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities or the rate at which
any Convertible Securities are convertible into or exchangeable for Common Stock
changes at any time, the Conversion Price in effect at the time of such change
shall be immediately adjusted to the Conversion Price which would have been in
effect at such time had such Options or Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or conversion
rate, as the case may be, at the time initially granted, issued or sold;
provided that if such adjustment would result in an increase of the Conversion
Price then in effect, such adjustment shall not be effective until 30 days after
written notice thereof has been given by the Corporation to all holders of the
Preferred Stock. For purposes of paragraph 7C, if the terms of any Option or
Convertible Security which was outstanding as of the date of issuance of the
Preferred Stock are changed in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such change; provided that no such change shall at
any time cause the Conversion Price hereunder to be increased.

          (iv) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
immediately to the Conversion Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Security, to
the extent outstanding immediately prior to such expiration or termination,
never been issued; provided that if such expiration or termination would result
in an increase in the Conversion Price then in effect, such increase shall not
be effective until 30 days after written notice thereof has been given by the
Corporation to all holders of the Preferred Stock. For purposes of paragraph 7C,
the expiration or termination of any Option or Convertible Security which was
outstanding as of the date of issuance of the Preferred Stock shall not cause
the Conversion Price hereunder to be adjusted unless, and only to the extent
that, a change in the terms of such Option or Convertible Security caused it to
be deemed to have been issued after the date of issuance of the Preferred Stock.

          (v) Calculation of Consideration Received. If any Common Stock, Option
or Convertible Security is issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor shall be deemed to be the amount
received by the Corporation therefor (net of discounts, commissions and related
expenses). If any Common Stock, Option or Convertible Security is issued or sold
for a consideration other than cash, the amount of the consideration other than
cash received by the Corporation shall be the fair value of such consideration,
except where such consideration consists of securities, in which case the amount

<PAGE>

of consideration received by the Corporation shall be the Conversion Price
determined as of the date of receipt. If any Common Stock, Option or Convertible
Security is issued to the owners of the non-surviving entity in connection with
any merger in which the Corporation is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Option or Convertible Security, as the case may be. The fair
value of any consideration other than cash and securities shall be determined
jointly by the Corporation and the holders of two-thirds of the outstanding
Preferred Stock. If such parties are unable to reach agreement within a
reasonable period of time, the fair value of such consideration shall be
determined by an independent appraiser experienced in valuing such type of
consideration jointly selected by the Corporation and the holders of two-thirds
of the outstanding Preferred Stock. The determination of such appraiser shall be
final and binding upon the parties, and the fees and expenses of such appraiser
shall be borne by the Corporation.

          (vi) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
shall be deemed to have been issued for a consideration of $.01.

          (vii) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation or any Subsidiary, and the disposition of any
shares so owned or held shall be considered an issue or sale of Common Stock.

          (viii) Record Date. If the Corporation takes a record of the holders
of Common Stock for the purpose of entitling them (a) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (b) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or upon the making of such other distribution or
the date of the granting of such right of subscription or purchase, as the case
may be.

     7D. Subdivision or Combination of Common Stock. If the Corporation at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect immediately prior to
such subdivision shall be proportionately reduced, and if the Corporation at any
time combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased.

     7E. Reorganization, Reclassification, Consolidation, Merger or Sale. Any
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or

<PAGE>

substantially all of the Corporation's assets or other transaction, in each case
which is effected in such a manner that the holders of Common Stock are entitled
to receive (either directly or upon subsequent liquidation) stock, securities or
assets with respect to or in exchange for Common Stock, is referred to herein as
an "Organic Change". Prior to the consummation of any Organic Change, the
Corporation shall make appropriate provisions (in form and substance reasonably
satisfactory to the holders of two-thirds of the Preferred Stock then
outstanding) to insure that each of the holders of Preferred Stock shall
thereafter have the right to acquire and receive, in lieu of or in addition to
(as the case may be) the shares of Conversion Stock immediately theretofore
acquirable and receivable upon the conversion of such holder's Preferred Stock,
such shares of stock, securities or assets as such holder would have received in
connection with such Organic Change if such holder had converted its Preferred
Stock immediately prior to such Organic Change. In each such case, the
Corporation shall also make appropriate provisions (in form and substance
satisfactory to the holders of two-thirds of the Preferred Stock then
outstanding) to insure that the provisions of this Section 7 and Sections 8 and
9 hereof shall thereafter be applicable to the Preferred Stock (including, in
the case of any such consolidation, merger or sale in which the successor entity
or purchasing entity is other than the Corporation, an immediate adjustment of
the Conversion Price to the value for the Common Stock reflected by the terms of
such consolidation, merger or sale, and a corresponding immediate adjustment in
the number of shares of Conversion Stock acquirable and receivable upon
conversion of Preferred Stock, if the value so reflected is less than the
Conversion Price in effect immediately prior to such consolidation, merger or
sale). The Corporation shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof, the successor entity (if other than
the Corporation) resulting from consolidation or merger or the entity purchasing
such assets assumes by written instrument (in form and substance satisfactory to
the holders of two-thirds of the Preferred Stock then outstanding), the
obligation to deliver to each such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to acquire.

     7F. Certain Events. If any event occurs of the type contemplated by the
provisions of this Section 7 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the
Corporation's Board of Directors shall make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of Preferred Stock;
provided that no such adjustment shall increase the Conversion Price as
otherwise determined pursuant to this Section 7 or decrease the number of shares
of Conversion Stock issuable upon conversion of each Share.

     7G. Notices.

          (i) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Preferred Stock,
setting forth in reasonable detail and certifying the calculation of such
adjustment.

<PAGE>

          (ii) The Corporation shall give written notice to all holders of
Preferred Stock at least 20 days prior to the date on which the Corporation
closes its books or takes a record (a) with respect to any dividend or
distribution upon Common Stock, (b) with respect to any pro rata subscription
offer to holders of Common Stock or (c) for determining rights to vote with
respect to any Organic Change, dissolution or liquidation.

          (iii) The Corporation shall also give written notice to the holders of
Preferred Stock at least 20 days prior to the date on which any Organic Change
shall take place.

     Section 8. Liquidating Dividends.

     If the Corporation declares or pays a dividend upon the Common Stock
payable otherwise than in cash out of earnings or earned surplus (determined in
accordance with generally accepted accounting principles, consistently applied)
except for a stock dividend payable in shares of Common Stock (a "Liquidating
Dividend"), then the Corporation shall pay to the holders of Preferred Stock at
the time of payment thereof the Liquidating Dividends which would have been paid
on the shares of Conversion Stock that would have been issued had such Preferred
Stock been converted immediately prior to the date on which a record is taken
for such Liquidating Dividend, or, if no record is taken, the date as of which
the record holders of Common Stock entitled to such dividends are to be
determined.

     Section 9. Purchase Rights.

     If at any time the Corporation grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
"Purchase Rights"), then each holder of Preferred Stock shall be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which such holder could have acquired if such holder had held
the number of shares of Conversion Stock acquirable upon conversion of such
holder's Preferred Stock immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or if no such record is
taken, the date as of which the record holders of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.

     Section 10. Events of Noncompliance.

     10A. Definition. An Event of Noncompliance shall have occurred if:

          (i) the Corporation fails to pay on any Dividend Payment Date the full
amount of dividends then accrued on the Preferred Stock, whether or not such
payments are legally permissible or are prohibited by any agreement to which the
Corporation is subject;

<PAGE>

          (ii) the Corporation fails to make any redemption payment (whether
following the giving of notice pursuant to paragraph 4C or otherwise) with
respect to the Preferred Stock which it is required to make hereunder, whether
or not such payment is legally permissible or is prohibited by any agreement to
which the Corporation is subject;

          (iii) the Corporation breaches or otherwise fails to perform or
observe any material provision contained herein, in the Purchase Agreement or in
the Related Documents (as defined in the Purchase Agreement) and (other than
with respect to Section 8.1 or 8.2(l) of the Purchase Agreement, or Section 7
hereof, the breach of or failure to perform which shall result in an immediate
Event of Noncompliance) such failure is not cured within fifteen (15) days after
the occurrence thereof;

          (iv) any representation or warranty contained in the Purchase
Agreement or required to be furnished to any holder of Preferred Stock pursuant
to the Purchase Agreement, or any information contained in writing required to
be furnished by the Corporation or any Subsidiary to any holder of Preferred
Stock, is false or misleading in any material respect on the date made or
furnished;

          (v) the Corporation or any Subsidiary makes an assignment for the
benefit of creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree is entered
adjudicating the Corporation or any Subsidiary bankrupt or insolvent; or any
order for relief with respect to the Corporation or any Subsidiary is entered
under the Federal Bankruptcy Code; or the Corporation or any Subsidiary
petitions or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Corporation or any Subsidiary or of any
substantial part of the assets of the Corporation or any Subsidiary, or
commences any proceeding (other than a proceeding for the voluntary liquidation
and dissolution of any Subsidiary) relating to the Corporation or any Subsidiary
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction; or the Corporation or
any Subsidiary takes any action to authorize any of the foregoing; or any such
petition or application is filed, or any such proceeding is commenced, against
the Corporation or any Subsidiary and either (a) the Corporation or any such
Subsidiary by any act indicates its approval thereof, consent thereto or
acquiescence therein or (b) such petition, application or proceeding is not
dismissed within 60 days;

          (vi) any material provision of the Purchase Agreement or any Related
Document shall at any time for any reason be declared to be null and void, or
the validity or enforceability thereof shall be contested by any party thereto,
or a proceeding shall be commenced by the Corporation or any Governmental
Authority or other regulatory body having jurisdiction over the Corporation,
seeking to establish the invalidity or enforceability thereof, or the
Corporation shall deny in writing that it has any liability or obligation
purported to be created under the Purchase Agreement or any Related Document;

<PAGE>

          (vii) (A) any registration statement required to be filed and declared
effective by the Corporation pursuant to the Purchase Agreement shall not become
effective as provided in the Purchase Agreement or shall cease to be effective,
(B) the Securities and Exchange Commission shall issue any stop order suspending
the effectiveness under the Securities Act of any registration statement
required to be filed and declared effective by the Corporation pursuant to the
Purchase Agreement or any state securities commission suspends the qualification
of the Registrable Securities covered thereby for offering or sale in any
jurisdiction, (C) any proceeding for purposes of either (A) or (B) above is
initiated, or (D) the Common Stock is suspended from trading on or the price for
the Common Stock is not quoted or reported on the NASDAQ Stock Market System or
the NASD's OTC Bulletin Board;

          (viii) the Company at any time shall not have reserved and available
authorized but unissued shares of Common Stock, solely for the purpose of
issuance upon conversion of the Preferred Stock, in the number which would be
issuable upon the conversion of all of the issued and outstanding Preferred
Stock; or

          (ix) the occurrence of a Material Adverse Change (as defined in the
Purchase Agreement).

     10B. Consequences of Events of Noncompliance.

          (i) If an Event of Noncompliance (other than an Event of Noncompliance
due to paragraph 10A(v)) has occurred and is continuing, (a) any holder of any
shares of Preferred Stock then outstanding may demand (by written notice
delivered to the Corporation), notwithstanding any other provision contained
herein, (1) the immediate conversion of all or any shares of such holder's or
holders' Preferred Stock at the applicable Conversion Price as of the date of
such holder's notice or (2) the immediate redemption of all or any portion of
the Preferred Stock owned by such holder or holders at a price per share equal
to the Redemption Price as of the date of such holder's notice plus interest
thereon at the rate of 3.5% per month or portion thereof from the date of the
occurrence of an Event of Noncompliance until paid in full, and (b) the dividend
rate on the Preferred Stock (including any Preferred Stock not redeemed or
converted pursuant to (1) and (2) above) shall increase immediately by an
increment of two percentage points. Thereafter, during the continuance of an
Event of Noncompliance and until such time as no Event of Noncompliance exists,
the dividend rate shall increase automatically at the end of each succeeding
90-day period by an additional increment of two percentage points (but in no
event shall the dividend rate exceed 15%). Any increase of the dividend rate
resulting from the operation of this subparagraph shall terminate as of the
close of business on the date on which no Event of Noncompliance exists, subject
to subsequent increases pursuant to this paragraph. The Corporation shall give
prompt written notice of any holder's election for immediate conversion or
redemption to the other holders of Preferred Stock (but in any event within five
days after receipt of the initial demand for conversion or redemption), and each
such other holder may demand immediate conversion or redemption

<PAGE>

of all or any portion of such holder's Preferred Stock by giving written notice
thereof to the Corporation within seven days after receipt of the Corporation's
notice. The Corporation shall convert or redeem all Preferred Stock as to which
rights under this paragraph have been exercised within 5 days after receipt of
the initial demand for conversion or redemption.

          (ii) If an Event of Noncompliance of the type described in
subparagraph 10A(v) has occurred, all of the Preferred Stock then outstanding
shall be subject to immediate redemption by the Corporation (without any action
on the part of the holders of the Preferred Stock) at a price per share equal to
the Redemption Price on the date of the occurrence of the Event of Noncompliance
plus interest thereon at the rate of 3.5% per month or portion thereof from the
date of the occurrence of the Event of Noncompliance until paid in full. The
Corporation shall immediately redeem all Preferred Stock upon the occurrence of
such Event of Noncompliance.

          (iii) If any Event of Noncompliance of the type described in
subparagraph 10A(i) occurs, for each such occurrence of the failure to pay on
any Dividend Payment Date the full amount of dividends then accrued on the
Preferred Stock, whether or not such payments are legally permissible or are
prohibited by any agreement to which the Corporation is subject, the Conversion
Price calculated at the time of conversion shall be reduced by $0.50 per share.
In no event shall any Conversion Price adjustment hereunder be rescinded.

          (iv) If any Event of Noncompliance of the type described in
subparagraph 10A(ii) occurs the Conversion Price calculated at the time of
conversion shall be reduced to 75% of the applicable Conversion Price in effect
at the time of conversion immediately prior to such adjustment. Thereafter, for
each succeeding 90-day period that the Event of Noncompliance continues
following the initial Event of Noncompliance referred to above, the Conversion
Price calculated at the time of conversion shall be reduced to 75% of the
Conversion Price in effect at the time of conversion immediately prior to such
adjustment. In no event shall any Conversion Price adjustment hereunder be
rescinded.

     For example, assume that an Event of Noncompliance of the type described in
subparagraph 10A(ii) has occurred and the Preferred Stock becomes immediately
convertible. Then assume that one year prior to such Event of Noncompliance
there had been a two-for-one stock split by the Corporation. Finally, assume
that, pursuant to Section 7B(i), the Conversion Price prior to the stock split
was $5.00. In this case, the Conversion Price of $5.00 would first be decreased
pursuant to Section 7D from $5.00 to $2.50. Then the Conversion Price calculated
at the time of conversion would be reduced to 75% of $2.50, or $1.875. If the
Event of Noncompliance had existed for an additional 90 days following the
initial Event of Noncompliance the Conversion Price at the time of conversion
would be reduced to 75% of $1.875, or $1.40625. If the Event of Noncompliance
had existed for an additional 90 days following the initial Event of
Noncompliance the Conversion Price at the time of conversion would be further
reduced to 75% of $1.40625, or $1.05469.

<PAGE>

          (v) If any Event of Noncompliance of the type described in
subparagraph 10A(vi) occurs, for each such occurrence the Conversion Price
calculated at the time of conversion shall be reduced by an amount equal to the
quotient of (a) the amount of the judgment referred to in subparagraph 10A(vi)
divided by (b) the number of shares of Common Stock Deemed Outstanding at the
time of the Event of Noncompliance.

          (vi) If any Event of Noncompliance of the type described in
subparagraph 10A(viii) occurs, for each such occurrence the Company hereby
covenants and agrees to issue or cause to be issued to the Purchaser on any such
date and on every date which is 30 days or a multiple thereof after such date,
until such Event of Noncompliance is cured, additional shares of Common Stock
equal in number to 10% of the total number of shares of Common Stock issued or
issuable upon conversion of all issued and outstanding Preferred Stock.

          (vii) If any Event of Noncompliance exists, each holder of Preferred
Stock shall also have any other rights which such holder is entitled to under
the Purchase Agreement or any other contract or agreement and any other rights
which such holder may have pursuant to applicable law.

          (viii) Neither the Corporation nor holders of the Preferred Stock
shall file any Tax Return (as defined in the Purchase Agreement) or take any
position with any taxing authority treating a reduction in the Conversion Price
pursuant to this Section 10B as a deemed dividend.

     10C. Right to Cure. Any breach, default in performance of any provision or
Event of Noncompliance of the Purchase Agreement or any of the Related Documents
which directly affects the Purchaser's ability to acquire the Preferred Shares
and Warrants, convert the Preferred Shares, Exercise the Warrants or sell
pursuant to a valid registration shall be interpreted in accordance with the
terms of this Purchase Agreement or the Related Document. Any breach, default in
performance of any provision or Event of Noncompliance of this Purchase
Agreement or any of the Related Documents which does not directly affect the
Purchaser's ability to acquire the Preferred Shares and Warrants, convert the
Preferred Shares, Exercise the Warrants or sell pursuant to a valid registration
shall be subject to written notice delivered to the Company and may be cured by
the Company during the five (5) days after receipt of written notice of such
breach, default or Event of Noncompliance.

     Section 11. Registration of Transfer.

     The Corporation shall keep at its principal office a register for the
registration of Preferred Stock. Subject to compliance with applicable
securities laws, upon the surrender of any certificate representing Preferred
Stock at such place, the Corporation shall, at the request of the record holder
of such certificate, execute and deliver (at the holder's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares of Preferred Stock represented by the surrendered
certificate. Each such new certificate

<PAGE>

shall be registered in such name and shall represent such number of shares of
Preferred Stock as is requested by the holder of the surrendered certificate and
shall be substantially identical in form to the surrendered certificate, and
dividends shall accrue on the Preferred Stock represented by such new
certificate from the date to which dividends have been fully paid on such
Preferred Stock represented by the surrendered certificate. All transfers of
Preferred Stock shall be subject to any restrictions imposed by applicable
federal and state securities laws.

     Section 12. Replacement.

     Upon receipt of evidence reasonably satisfactory to the Corporation (an
affidavit of the registered holder shall be satisfactory) of the ownership and
the loss, theft, destruction or mutilation of any certificate evidencing shares
of any of the Preferred Stock, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation, or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at the holder's expense) execute and deliver
in lieu of such certificate a new certificate of like kind representing the
number of shares of Preferred Stock of such class represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate, and dividends shall accrue on the
Preferred Stock represented by such new certificate from the date to which
dividends have been fully paid on such lost, stolen, destroyed or mutilated
certificate.

     Section 13. Amendment and Waiver.

     No amendment, modification or waiver shall be binding or effective with
respect to any provision of Sections 1 to 10 hereof without the prior written
consent of the holders of at least 51% of the Preferred Stock outstanding at the
time such action is taken; provided that no such action shall change (a) the
rate at which or the manner in which dividends on the Preferred Stock accrue or
the times at which such dividends become payable or the amount payable on
redemption of the Preferred Stock or the times at which redemption of Preferred
Stock is to occur, without the prior written consent of the holders of at least
80% of the Preferred Stock then outstanding, (b) the Conversion Price of the
Preferred Stock or the number of shares or class of stock into which the
Preferred Stock is convertible, without the prior written consent of the holder
of at least 80% of the Preferred Stock then outstanding or (c) the percentage
required to approve any change described in clauses (a) and (b) above, without
the prior written consent of the holders of at least 80% of the Preferred Stock
then outstanding.

     Section 14. Notices.

     Except as otherwise expressly provided hereunder, all notices referred to
herein shall be in writing and shall be delivered by registered or certified
mail, return receipt requested and postage prepaid, or by reputable overnight
courier service, charges prepaid, and shall be deemed to have been given when so
mailed or sent (i) to the Corporation, at its principal executive

<PAGE>

offices and (ii) to any stockholder, at such holder's address as it appears in
the stock records of the Corporation (unless otherwise indicated by any such
holder).

     IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Designation to be signed by its President
and Secretary this ____ day of December, 1999

                     CERTIFICATE OF PRESIDENT AND SECRETARY

KNOW ALL MEN BY THESE PRESENTS:

     That the undersigned John M. Hopkins, President of Venturi Technologies,
Inc., a Nevada corporation (the "Corporation"), and Randy K. Johnson, Secretary
of the Corporation, do hereby certify that the Articles of Incorporation for the
Corporation provide that Series of preferred stock may be established by
resolution of the Board of Directors, and that the above and foregoing
Certificate of Designation of Preferences, Limitations and Relative Rights of
said Corporation was duly and regularly adopted as such by a resolution of all
of the members of the Board of Director of the Corporation on December ___,
1999.

      Dated: December ___, 1999.

                                          ------------------------------------
                                          John M. Hopkins, President

                                          ------------------------------------
                                          Randy K. Johnson,  Secretary

                                 ACKNOWLEDGMENT

STATE OF UTAH     )
                  )ss:
COUNTY OF UTAH    )

     On the ___ day of December, 1999, personally appeared before me John M.
Hopkins, President of Venturi Technologies, Inc., personally known to me or
proved to me on the basis of satisfactory evidence to be the person whose name
is signed on the preceding document, and acknowledged to me that he signed it
voluntarily for its stated purpose.

                                          ------------------------------------
                                          NOTARY PUBLIC

<PAGE>

                                                                       Exhibit A

                          FORM OF NOTICE OF CONVERSION

Venturi Technologies,  Inc.
763 North 530 East
Orem Utah 84057

cc:   [Name of Transfer Agent]

      Re:  Series E Cumulative Convertible Preferred Stock

Gentlemen:

     The undersigned registered holder hereby elects to convert _____ [number]
shares of Series E Cumulative Convertible Preferred Stock of the Corporation
into shares of Common Stock, par value $.001 per share, of the Corporation
pursuant to the Certificate of Designation for Series E Preferred Stock dated
December ___, 1999.

     The number of shares of Common Stock to be issued to the undersigned is
_____ shares, based on a conversion price of $___ per share.

     Date:
           -------------              ------------------------------------
                                      Authorized Signature of Registered Holder

                             CONFIRMATION OF RECEIPT
                             OF NOTICE OF CONVERSION
                           AND CONVERSION CALCULATION:

     Acknowledged:                    VENTURI TECHNOLOGIES, INC.

                                      By
                                        ---------------------------------
                                      Name:
                                           ------------------------------
                                      Title:
                                            -----------------------------

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