Document:

State of Delaware

                      Office of the Secretary of State         PAGE 1

         I, EDWARD J. FREEL,  SECRETARY  OF STATE OF THE STATE OF  DELAWARE,  DO
HEREBY CERTIFY THE ATTACHED  IS A TRUE AND CORRECT COPY  OF  THE  CERTIFICATE OF
DESIGNATION OF "INSTANT VIDEO  TECHNOLOGIES,  INC.", FILED IN THIS OFFICE ON THE
NINTH DAY OF MAY, A.D. 1995. AT 9 O'CLOCK A.M.

                                 [SEAL]      /s/  Edward J. Freel
                                             -----------------------------------
                                             Edward J. Freel, Secretary of State

                                             AUTHENTICATION:
2229021 8100                                                    7965006
                                                       DATE:
960155750                                                       05-29-96

<PAGE>
STATE OF DELAWARE                                                      ORIGINAL
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 05/09/1995
950102455 - 2229021

                           CERTIFICATE OF DESIGNATION

                STATEMENT ESTABLISHING SERIES OF PREFERRED STOCK
                                       OF
                        INSTANT VIDEO TECHNOLOGIES, INC.
                      SERIES E CONVERTIBLE PREFERRED STOCK

         Pursuant  to  the  requirements  of  Section  151(a)  of  the  Delaware
Corporation  Law, the undersigned  Corporation  submits the following  Statement
Establishing Series of Preferred Stock.

         FIRST: The name of the Corporation is Instant Video Technologies, Inc.

         SECOND:  A copy of the  resolutions  establishing  and  designating the
series and fixing and  determining  the relative  rights and  preferences of the
Series E Convertible Preferred Stock is attached hereto as Exhibit A.

         THIRD:  Such resolutions were duly adopted by the Board of Directors of
the Corporation on the 17th day of February, 1995.

         IN  TESTIMONY  WHEREOF,  the  undersigned  Corporation  has caused this
Statement to be signed by a duly authorized officer and duly attested by another
such officer this 17th day of February, 1995.

                                         INSTANT VIDEO TECHNOLOGIES, INC.

                                         By /s/ Gary R. Familian
                                            ------------------------------------
                                            Gary R. Familian, President

ATTEST:

/s/ John J. Micek
-----------------------------
John J. Micek, III, Secretary
<PAGE>

                                    Exhibit A
                      Series E Couvertible Preferred Stock

WHEREAS,  the Certificate of  Incorporation  of the  Corporation  provides for a
class of shares of stock designated "Preferred Stock," and vests in the Board of
Directors the authority to specify the number of shares of Preferred Stock to be
issued,  to divide the Preferred  Stock into one or more series within any class
thereof,  and to fix the number of Shares in such series,  and the  preferences,
rights and restrictions thereof; and

WHEREAS,  the Corporation desires to designate a Series E Convertible  Preferred
Stock;

NOW,  THEREFORE,  be it resolved that there shall be another series of Preferred
Stock of the Corporation  designated "Series E Convertible Preferred Stock." The
number of shares of Series H Convertible Preferred Stock shall be 1,000,000. The
powers, designations, preferences and relative, participating, optional or other
special rights of the shares of the Series E Convertible Preferred Stock and the
qualifications,  limitations  and  restrictions  of such  preferences and rights
shall be as follows:

         1. Dividend  Provisions The holders of  outstanding  shares of Series E
Convertible  Preferred Stock  described  herein shall not be entitled to receive
any fixed dividends.

            (a) In  the  event  of any  voluntary  or  involuntary  liquidation,
dissolution or winding up of the affairs of the Corporation,  the holder of each
share of Series E Convertible  Preferred Stock shall be entitled to receive, out
of the assets of the Corporation  available for distribution to its stockholders
before any payment or distribution  shall be made on the Common Stock, and after
any payment or distribution shall be made on the Series D Convertible  Preferred
Stock,  an  amount per  share  equal to  $1.00.  If the  assets and  funds to be
distributed among the holders of the Series H Convertible  Preferred Stock shall
be insufficient to permit the payment of the full aforesaid  preferential amount
to such  holders,  then the entire assets and funds of the  Corporation  legally
available for the  distribution  shall be  distributed  among the holders of the
Series H Convertible Preferred Stock in proportion to the aggregate preferential
amount of all shares of Series E Convertible Preferred Stock held by them. After
payment  has been made to the  holders  of the  Series E  Convertible  Preferred
Stock, the holders of the Common Stock shall be entitled to share ratably in the
remaining  assets on the basis of the  number of shares of Common  stock held by
them at the time of such liquidation.

            (b) For purposes of this Section 2, a merger or consolidation of the
Corporation with or into any other corporation or corporations, or the merger of
any other corporation or corporations into the Corporation, or the sale

<PAGE>

or any other corporate reorganization,  in which shareholders of the Corporation
receive distributions as a result of such consolidation,  merger, sale of assets
or reorganization,  shall be treated as a liquidation, dissolution or winding up
of the  Corporation,  unless the  stockholders of the Corporation hold more than
fifty  percent  (50%)  of the  voting  equity  securities  of the  successor  or
surviving corporation immediately following such consolidation,  merger, sale of
assets or  reorganization  in which event such  consolidation,  merger,  sale of
assets, or reorganization shall not be treated as a liquidation,  dissolution or
winding up.

         3. Conversion The Series E Convertible Preferred Stock may be converted
into Common  Stock upon the  following  terms and  conditions  (the  "Conversion
Rights"):

            (a) Conversion During the three (3) year period commencing  February
17,1995,  all of the  shares  of  Series E  Convertible  Preferred  Stock may be
converted  into shares of Common Stock in accordance  with  paragraphs  3(b) and
3(c)  hereof,  at such time or times as the holders of the Series E  Convertible
Preferred Stock are called for redemption,  the conversion rights will terminate
at the dose of business on the Redemption Date (30 days after the written notice
is provided).

            (b) Mechanics of Conversion.  The applicable  conversion shall occur
effective upon the election of the holder of the Series E Convertible  Preferred
Stock;  provided,  however,  that the  election to convert must occur before the
earlier of February 17, 1998, or the  redemption  date. The holder of the shares
of Series E Convertible  Preferred Stock which are converted shall surrender the
certificate  or  certificates  therefor,  duly  endorsed,  at the  office of the
Corporation  or any  authorized  transfer  agent for such stock  together with a
written  statement that he elects to convert his Series E Convertible  Preferred
Stock into Common Stock.  The  Corporation  or the transfer agent shall promptly
issue  and  deliver  at such  office  to such  holder  of  Series E  Convertible
Preferred Stock a certificate or certificates for the number of shares of Common
Stock to which  such  holder is thereby  entitled.  The  effective  date of such
conversion  shall be the date upon which the holder  provides  written notice of
his election to convert to the Corporation or transfer agent.

            (c)  Conversion  Ratio Each share of Series B Convertible  Preferred
Stock  will be  converted  into one (1) fully  paid and  nonassessable  share of
Common Stock (except as adjusted pursuant to paragraph 3(d) below).

            (d) Adjustment of Conversion Rate.

                  (i)Stock Splits: Stock Dividends.  If the Corporation shall at
any  time,  or from time to time,  after  the  effective  date  hereof  effect a
subdivision  of the  outstanding  Common  Stock and not  effect a  corresponding
subdivision of the Series E Convertible  Preferred  Stock, or if the Corporation
at any time or from time to time after the  effective  date hereof shall make or
issue, or fix a

<PAGE>

record  date for the  determination  of  holders  of Common  Stock  entitled  to
receive, a dividend or other distribution payable in additional shares of Common
Stock, then and in each such event the number of shares of Common Stock issuable
upon  conversion of the  Convertible  Preferred  Stock shall be  proportionately
increased  as of the time of such  issuance  or, in the event such a record date
shall have been fixed, as of the dose of business on such record date.

                  (ii) In  case  the  outstanding  shares  of  Common  Stock  be
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares of Common  Stock,  the number of shires of Common Stock  issuable upon
conversion  of the  Convertible  Preferred  Stock shall,  concurrently  with the
effectiveness  of  such  combination  or   consolidation,   be   proportionately
decreased.

            (e) No  Impairment.  The  Corporation  will not, by amendment of its
Certificate of Incorporation or through any reorganization,  transfer of assets,
consolidation,  merger,  dissolution,  issue or sale of  securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation,  but will at
all times in good faith assist in the carrying  out of all of the  provisions of
this  Section 3 and in the  taking of all such  action  as may be  necessary  or
appropriate  in order to protect  the  Conversion  Rights of the  holders of the
Convertible Preferred Stock against impairment.

            (f) Reservation of Stock Issuable Upon  Conversion.  The Corporation
shall at all times reserve and keep  available out of its authorized by unissued
shares of Common Stock,  solely for the purpose of effecting  the  conversion of
the shares of Series E Convertible Preferred Stock, such number of its shares of
Common Stock as shall from time to time be sufficient  to effect the  conversion
of all outstanding shares of Series E Convertible Preferred Stock; and if at any
time the number of authorized  but unissued  shares of Common Stock shall not be
sufficient  to  effect  the  conversion  of all  outstanding  shares of Series E
Convertible  Preferred Stock, the Corporation will take such corporate action as
is necessary to increase its authorized  but unissued  shares of Common Stock to
such number of shares as shall be sufficient for such purpose.

            (g) Notices.  Any notice  required to be give to holders o shares of
Series E Convertible  Preferred  Stock shall be deemed given upon deposit in the
United States mail,  postage prepaid,  addressed to such holder of record at his
address appearing on the books of the Corporation,  or upon personal delivery at
the aforementioned address.

         4. Voting Rights.  Each share of Series E Convertible  Preferred  Stock
shall  entitle  the holder to one (1) vote and with  respect to each such vote a
holder of shares of Series E Convertible  Preferred Stock shall have full voting
rights and powers equal to the voting rights and powers of a holder of shares of
Common  Stock,  share  for  share,  and  shall  be  entitled  to  notice  of any
shareholders'

<PAGE>

meeting in accordance with the Bylaws of the Corporation,  and shall be entitled
to vote with holders of Common Stock together as a single class.

         5. Redemption  Provisions  Commencing on February 17,19%, any shares of
Series E Convertible  Preferred  Stock which have not been converted into Common
Stock may be redeemed by the Corporation upon, the payment of $1.08 per share to
the holder thereof after giving 30 days written notice.

         6.  Status of  Converted  or  Reacquired  Stock.  In case any shares of
Series E Convertible  Preferred  Stock shall be converted  pursuant to Section 3
hereof,  or redeemed  pursuant to Section 5 hereof,  the shares so  converted or
redeemed  shall  cease  to be a part  of the  authorized  capital  stock  of the
Corporation.

         7. Registration Rights. If the holders of at least seventy-five percent
(75%) of the series E convertible  preferred stock agree to convert their shares
of Series E Convertible Preferred Stock into Common Stock, the Corporation shall
use its best efforts to file a  registration  statement  with the Securities and
Exchange  Commission on the later of December 31,1997,  or the date on which the
holders of at 75% of the Series E  Convertible  Preferred  Stock have  agreed to
convert their shares of Series E Convertible  Preferred  Stock for Common Stock.
The  registration  statement  will cover the shares of Common.  Stock which have
been acquired upon the conversion of the Series E Convertible  Preferred  Stock.
The  Company  agrees to  include  the  shares  which may be  purchased  upon the
exercise of this Common Stock Option in any Registration  Statement filed by the
Company  which is. a proper form for  registration  of such shares in which such
shares may be  registered.  The Company will not be required to register a share
of common stock on more than one registration statement.State of Delaware
                                                                          PAGE 1
                        Office of the Secretary of State

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

         I, EDWARD J. FREEL,  SECRETARY  OF STATE OF THE STATE OF  DELAWARE,  DO
HEREBY  CERTIFY THE  ATTACHED IS A TRUE AND CORRECT COPY OF THE  CERTIFICATE  OF
DESIGNATION OF "INSTANT VIDEO  TECHNOLOGIES,  INC.", FILED IN THIS OFFICE ON THE
THIRTEENTH DAY OF FEBRUARY, A.D. 1996, AT 9 O'CLOCK A.M.

                                            /s/ Edward J. Freel
                                            ------------------------------------
                                            Edward J. Freel, Secretary of State

                                             AUTHENTICATION:         7965007

                                                       DATE:         05-29-96

2229021 8100

960155750

<PAGE>

                           CERTIFICATE OF DESIGNATION

                STATEMENT ESTABLISHING SERIES OF PREFERRED STOCK
                                       OF
                        INSTANT VIDEO TECHNOLOGIES, INC.
                      SERIES F CONVERTIBLE PREFERRED STOCK

         Pursuant  to  the  requirements  of  Section  151(a)  of  the  Delaware
Corporation  Law, the undersigned  Corporation  submits the following  Statement
Establishing Series of Preferred Stock.

         FIRST: The name of the Corporation is Instant Video Technologies, Inc.

         SECOND:  A copy of the  resolutions  establishing  and  designating the
series and fixing and  determining  the relative  rights and  preferences of the
Series F Convertible Preferred Stock is attached hereto as Exhibit A.

         THIRD:  Such resolutions were duly adopted by the Board of Directors of
the Corporation on the 8th day of February, 1996.

         IN  TESTIMONY  WHEREOF,  the  undersigned  Corporation  has caused this
Statement to be signed by a duly authorized officer and duly attested by another
such officer this 8th day of February,  1996.

                                         INSTANT VIDEO TECHNOLOGIES, INC.

                                         By /s/ Gary R. Familian
                                            ------------------------------------
                                            Gary R. Familian, President

ATTEST:

/s/ John J. Micek,  III
------------------------------------
John J. Micek,  III,  Secretary

                                                    STATE OF DELAWARE
                                                   SECRETARY OF STATE
                                                DIVISION OF CORPORATIONS
                                               FILED 09:00 AM 02/13/1996
                                                  980041994 - 2229021

<PAGE>

                                    Exhibit A

                      Series F Convertible Preferred Stock

WHEREAS,  the Certificate of  Incorporation  of the  Corporation  provides for a
class of shares of stock designated "Preferred Stock," and vests in the Board of
Directors the authority to specify the number of shares of Preferred Stock to be
issued,  to divide the Preferred  Stock into one or more series within any class
thereof,  and to fix the number of Shares in such series,  and the  preferences,
rights and restrictions thereof; and

WHEREAS,  the Corporation desires to designate a Series F Convertible  Preferred
Stock;

NOW,  THEREFORE,  be it resolved that there shall be another series of Preferred
Stock of the Corporation  designated "Series F Convertible Preferred Stock." The
number of shares of Series F Convertible Preferred Stock shall be 5,000,000. The
powers, designations, preferences and relative, participating, optional or other
special rights of the shares of the Series F Convertible Preferred Stock and the
qualifications,  limitations  and  restrictions  of such  preferences and rights
shall be as follows:

         1.  Definitions.  For purposes of this Certificate of Designation,  the
following definitions will apply:

         (a)  "Additional  Shares of Common  Stock"  means all  shares of Common
Stock issued or deemed issued by the Corporation after the sale of any shares of
Series F  Stock,  whether  or not  subsequently  reacquired  or  retired  by the
Company,  other than (i) shares of Common  Stock issued upon  conversion  of the
Corporation's Series A through F Convertible  Preferred Stock; or (ii) shares of
Common Stock (and any related options or warrants therefor) issued to employees,
officers,  directors,   consultants,   contractors,   agents  or  other  persons
performing services or for extending credit to the Corporation,  issued pursuant
to any stock option plan,  stock purchase plan, stock bonus plan, or other plan,
agreement or arrangement approved by the Board.

         (b) "Board" means the Board of Directors of the Corporation.

         (c) "Common Stock" means the Common Stock of the Corporation.

         (d) "Common Stock's Fair Market Value" means the fair market value of a
share of Common Stock,  as determined in good faith by the Board for the purpose
of granting stock options or issuing  shares to employees of the  Corporation or
any subsidiary of the Company as of the applicable date.

         (e) "Corporation" means this corporation.

                                       1

<PAGE>

         (f)  "Original  Issue  Price"  means  $1.00 per share for the  Series F
Stock.

         (g) "Series F Stock"  means the Series F  Convertible  Preferred  Stock
established hereby.

         (h)  "Reference  Date" means,  with respect to the Series F Stock,  the
date this  Certificate  of  Designation  is filed with the Secretary of State of
Delaware.

         2. Dividend  Provisions.  The holders of outstanding shares of Series F
Stock described herein shall not be entitled to receive any fixed dividends.

         3. Liquidation Preference.

         (a)  In  the  event  of  any  voluntary  or  involuntary   liquidation,
dissolution or winding up of the affairs of the Corporation,  the holder of each
share of Series F Stock shall be  entitled to receive,  out of the assets of the
Corporation available for distribution to its stockholders before any payment or
distribution  shall be made on the  Common  Stock,  and  after  any  payment  or
distribution  shall be made on the  Series E  Convertible  Preferred  Stock,  an
amount per share equal to $1.00, adjusted for any combinations,  consolidations,
or stock  distributions or dividends with respect to such shares occurring after
the date hereof,  and, in  addition,  an amount equal to all declared but unpaid
dividends on the Series F Stock. If the assets and funds to be distributed among
the holders of the Series F Stock shall be insufficient to permit the payment of
the full aforesaid  preferential amount to such holders,  then the entire assets
and funds of the  Corporation  legally  available for the  distribution  to such
holders  shall  be  distributed  among  the  holders  of the  Series  F Stock in
proportion to the aggregate  preferential amount of all shares of Series F Stock
held by them.  After payment has been made to the holders of the Series F Stock,
the  holders of the  Common  Stock  shall be  entitled  to share  ratably in the
remaining  assets on the basis of the  number of shares of Common  Stock held by
them at the time of such liquidation.

         (b) For  purposes of this Section 3, a merger or  consolidation  of the
Corporation with or into any other corporation or corporations, or the merger of
any other corporation or corporations  into the Corporation,  or the sale or any
other corporate reorganization, in which shareholders of the Corporation receive
distributions  as a result  of such  consolidation,  merger,  sale of  assets or
reorganization,  shall be treated as a liquidation, dissolution or winding up of
the Corporation, unless the stockholders of the Corporation hold more than fifty
percent  (50%) of the voting  equity  securities  of the  successor or surviving
corporation immediately following such consolidation,  merger, sale of assets or
reorganization in which event such consolidation,

                                       2

<PAGE>

merger, sale of assets, or reorganization shall not be treated as a liquidation,
dissolution or winding up.

         4.  Conversion.  The  holders  of the  Series  F Stock  will  have  the
following conversion rights:

         (a) Right to Convert. Each share of Series F Stock will be convertible,
at any time or from time to time at the option of the holder thereof, into fully
paid and nonassessable shares of Common Stock as provided herein.

         (b) Conversion  Price. Each share of Series F Stock will be convertible
into the  number of shares of Common  Stock  which  results  from  dividing  the
conversion  price  of the  Series  F Stock  that  is in  effect  at the  time of
conversion  (the  "Conversion  Price")  into the  Original  Issue Price for such
series of Preferred Stock.  The initial  Conversion Price for the Series F Stock
will be the original Issue Price for such series.  The Conversion  Price will be
subject to adjustment from time to time as provided below.

         (c) Mechanics of Conversion.  Each holder of Series F Stock who desires
to convert the same into shares of Common Stock will  surrender the  certificate
or certificates therefor, duly endorsed, at the office of the Corporation or any
transfer  agent for the Series F Stock or Common  Stock,  and will give  written
notice to the  Corporation at such office that such holder elects to convert the
same and will  state  therein  the  number of  shares  of  Series F Stock  being
converted.  Thereupon the  Corporation  will promptly  issue and deliver at such
office to such holder a certificate or certificates for the number of  shares of
Common Stock to which such holder is entitled and will  promptly pay in cash any
declared and unpaid  dividends on the shares of Series F Stock being  converted.
Such conversion will be deemed to have been made immediately  prior to the close
of business on the date of such surrender of the  certificate  representing  the
shares of Series F Stock to be converted, and the person entitled to receive the
shares of Common Stock  issuable  upon such  conversion  will be treated for all
purposes as the record holder of such shares of Common Stock on such date.

         (d) Adjustment for Stock Splits and Combinations. If the Corporation at
any time or from time to time  after the  Reference  Date of the  Series F Stock
effects a subdivision of the outstanding  Common Stock, the Conversion Price for
such  Series F Stock in  effect  immediately  before  that  subdivision  will be
proportionately  decreased,  and, conversely,  if the Corporation at any time or
from time to time after the  Reference  Date of the Series F Stock  combines the
outstanding  shares  of  Common  Stock  into a smaller  number  of  shares,  the
Conversion  Price  for the  Series  F Stock in  effect  immediately  before  the
combination will be proportionately

                                       3

<PAGE>

increased.  Any adjustment  under this Section 4(d) will become effective at the
close of business on the date the subdivision or combination becomes effective.

         (e) Adjustment  for Common Stock  Dividends and  Distributions.  If the
Corporation at any time or from time to time after the Reference Date makes,  or
fixes a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional shares of Common
Stock,  in each such event the  Conversion  Price for the Series F Stock that is
then in effect  will be  decreased  as of the time of such  issuance  or, in the
event such  record  date is fixed,  as of the close of  business  on such record
date, by multiplying  the Conversion  Price then in effect by a fraction (1) the
numerator  of which is the total  number of shares of Common  Stock  issued  and
outstanding  immediately  prior to the  time of such  issuance  or the  close of
business  on such record  date,  and (2) the  denominator  of which is the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such  issuance  or the close of  business  on such  record date plus the
number of shares of  Common  Stock  issuable  in  payment  of such  dividend  or
distribution;  provided,  however,  that if such  record  date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor,  the applicable Conversion Price will be recomputed  accordingly
as of the close of business on such record date and  thereafter  the  Conversion
Price will be  adjusted  pursuant  to this  Section  4(e) to reflect  the actual
payment of such dividend or distribution.

         (f)  Adjustments  for  Other  Dividends  and   Distributions.   If  the
Corporation  at any time or from time to time  after the  Reference  Date of the
Series F Preferred Stock makes, or fixes a record date for the  determination of
holders of Common Stock  entitled to receive,  a dividend or other  distribution
payable in securities of the  Corporation  other than shares of Common Stock, in
each such event  provision  will be made so that the  holders of such  series of
Preferred Stock will receive upon conversion  thereof, in addition to the number
of shares of Common Stock receivable thereupon,  the amount of securities of the
Corporation  which they  would  have  received  had their  Preferred  Stock been
converted  into Common Stock on the date of such event and had they  thereafter,
during the period from the date of such event to and  including  the  conversion
date,  retained  such  securities  receivable  by them as aforesaid  during such
period,  subject to all other  adjustments  called for during such period  under
this  Section 4 with  respect to the rights of the holders of the Series F Stock
or with respect to such other securities by their terms.

         (g) Adjustment for  Reclassification  Exchange and Substitution.  If at
any time or from time to time  after the  Reference  Date of the Series F Stock,
the Common Stock issuable upon the conversion of such series of Preferred  Stock
is changed into the same or a different number of shares of any class or

                                       4

<PAGE>

classes of stock,  whether by  recapitalization,  reclassification  or otherwise
(other  than a  subdivision  or  combination  of shares or stock  dividend  or a
reorganization,  merger,  consolidation or sale of assets provided for elsewhere
in this Section 4 or Section  3(b)),  then in any such event each holder of such
series of Preferred  Stock will have the right  thereafter to convert such stock
into the kind and amount of stock and other  securities and property  receivable
upon such  recapitalization,  reclassification or other change by holders of the
maximum  number of shares of Common  Stock into  which  such  shares of Series F
Stock  could have been  converted  immediately  prior to such  recapitalization,
reclassification or change, all subject to further adjustment as provided herein
or with respect to such other securities or property by the terms thereof.

         (h)  Reorganizations.  If at any time or from  time to time  after  the
Reference  Date of the Series F Stock there is a capital  reorganization  of the
Common  Stock  (other  than  a   recapitalization,   subdivision,   combination,
reclassification,  exchange or  substitution of shares provided for elsewhere in
this Section 4 or in Section  3(b)),  as a part of such  capital  reorganization
provision  will be made so that the  holders of such series of  Preferred  Stock
will  thereafter  be  entitled  to receive  upon  conversion  of such  series of
Preferred Stock the number of shares of stock or other securities or property of
the  Company  to  which a  holder  of the  number  of  shares  of  Common  Stock
deliverable   upon   conversion   would  have  been  entitled  on  such  capital
reorganization,  subject to adjustment in respect of such stock or securities by
the terms thereof. In any such case,  appropriate adjustment will be made in the
application  of the  provisions  of this Section 4 with respect to the rights of
the holders of Series F Stock after such capital  reorganization to the end that
the provisions of this Section 4 (including  adjustment of the Conversion  Price
then in  effect  and the  number  of  shares  issuable  upon  conversion  of the
Preferred Stock) will be applicable after that event and be as nearly equivalent
as practicable.

         (i)  Adjustment to Series F Stock  Conversion  Price For Sale of Shares
Below Conversion Price.

         (A) If at any time or from time to time  after the  Reference  Date for
the Series F Stock, the Corporation  issues or sells Additional Shares of Common
Stock, other than as a dividend or other distribution on any class of stock with
a  Conversion  Price  adjustment  as  provided  herein  and  other  than  upon a
subdivision  or  combination  of shares of Common Stock with a Conversion  Price
adjustment  as  provided  herein,  for a  consideration  per share less than the
then-existing  Conversion  Price for Series F Stock then,  and in each case that
the  consideration  per share is less than such  Conversion  Price for  Series F
Stock then in effect,  such Conversion Price will be reduced,  as of the opening
of  business  on the  date of such  issue  or  sale,  to a price  determined  by
multiplying that

                                       5

<PAGE>

Conversion Price by a fraction (1) the numerator of which will be the sum of (a)
the number of shares of Common Stock outstanding immediately prior to such issue
or sale,  plus (b) the  number  of shares of  Common  Stock  that the  aggregate
consideration  received (or deemed  received) by the  Corporation  for the total
number of Additional  Shares of Common Stock so issued (or deemed  issued) would
purchase at such Conversion  Price, and (2) the denominator of which will be the
sum of (a) the number of shares of Common Stock outstanding immediately prior to
such issue or sale plus (b) the number of such Additional Shares of Common Stock
so issued (or deemed issued).

                  (B) For the purpose of making any adjustment in the Conversion
Price for the Series F Stock under this Section 4(i),  consideration received by
the Corporation for any issue or sale of securities will:

                  (1) to the extent it consists of cash,  be computed at the net
amount of cash received by the Corporation  after deduction of any  underwriting
or similar  commissions,  concessions,  or  compensation  paid or allowed by the
Corporation in connection with such issue or sale;

                  (2) to the extent it consists of property  other than cash, be
computed at the fair value of that  property as  determined in good faith by the
Board; and

                  (3)  if  Additional   Shares  of  Common  Stock,   Convertible
Securities (as  hereinafter  defined),  or rights or options to purchase  either
Additional  Shares of Common Stock or Convertible  Securities are issued or sold
together with other stock or securities or other assets of the Corporation for a
consideration  that covers both, be computed as the portion of the consideration
so received that may be  reasonably  determined in good faith by the Board to be
allocable to such Additional Shares of Common Stock,  Convertible  Securities or
rights or options.

                  (C) For the purpose of the adjustment provided in this Section
4(i),  if at any time or from  time to time  after  the  Reference  Date for the
Series F Stock,  the  Corporation  issues any rights or options for the purchase
of, or stock or other securities  convertible into,  Additional Shares of Common
Stock  (such  convertible  stock  or  securities   hereinafter  referred  to  as
"Convertible  Securities")  then  in  each  case,  if the  Effective  Price  (as
hereinafter defined) of such rights,  options, or Convertible Securities is less
than the then-existing  Conversion Price for the Series F Stock, the Corporation
will be deemed  to have  issued at the time of the  issuance  of such  rights or
options or Convertible  Securities  the maximum  number of Additional  Shares of
Common Stock  issuable upon exercise or conversion  thereof and to have received
as  consideration  for the  issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the

                                       6

<PAGE>

Corporation   for  the  issuance  of  such  rights  or  options  or  Convertible
Securities,  plus, in the case of such options or rights, the minimum amounts of
consideration,  if  any,  payable  to the  Corporation  upon  full  exercise  or
conversion of such options or rights. As used in this Section 4(i)(C),  the term
"Effective  Price" means the quotient determined by dividing the total of all of
such  consideration by such maximum number of Additional Shares of Common Stock.
No further  adjustment of the Conversion  Price for Series F Stock adjusted upon
the issuance of such rights,  options, or Convertible Securities will be made as
result of the  actual  issuance  of  Additional  Shares  of Common  Stock on the
exercise of any such rights or options or the conversion of any such Convertible
Securities.

         If any such rights or options or the conversion  privilege  represented
by any such Convertible  Securities  expire without having been exercised,  then
the  Conversion  Price for Series F Stock,  adjusted  upon the  issuance of such
rights,  options, or Convertible Securities will be readjusted to the applicable
Conversion  Price that would have been in effect had an adjustment  been made on
the basis that the only  Additional  Shares of Common  Stock so issued  were the
Additional  Shares  of  Common  Stock,  if any,  actually  issued or sold on the
exercise of such rights or options or rights of conversion  of such  Convertible
Securities,  and such Additional  Shares of Common Stock, if any, were issued or
sold for the  consideration  actually  received  by the  Corporation  upon  such
exercise,  plus the consideration,  if any, actually received by the Corporation
for the granting of all such rights or options,  whether or not exercised,  plus
the  consideration  received for issuing or selling the  Convertible  Securities
actually  converted,  plus the  consideration,  if any, actually received by the
Corporation on the conversion of such Convertible Securities.

                  (D) For the purpose of the adjustment provided in this Section
4(i),  if at any time or from  time to time  after  the  Reference  Date for the
Series F Stock,  the  Corporation  issues any rights or options for  Convertible
Securities, then, in each such case, if the Effective Price thereof is less than
the then current  Conversion  Price for Series F Stock,  the Corporation will be
deemed to have issued at the time of the  issuance of such rights or options the
maximum number of Additional  Shares of Common Stock issuable upon conversion of
the total amount of Convertible Securities covered by such rights or options and
to have received as consideration  for the issuance of such Additional Shares of
Common Stock an amount equal to the amount of consideration, if any, received by
the  Corporation  for the  issuance of such rights or options,  plus the minimum
amount consideration,  if any, payable to the Corporation upon the full exercise
of such rights or options  plus the  minimum  amount of  consideration,  if any,
payable  to the  Corporation  upon  the  full  conversion  of  such  Convertible
Securities.  As used in this Section 4(i)(D),  the term "Effective  Price" means
the quotient determined by dividing the total amount

                                       7

<PAGE>

of such  consideration  by such maximum  number of  Additional  Shares of Common
Stock.  No  further  adjustment  of the  Conversion  Price  for  Series F Stock,
adjusted upon the issuance of such rights or options will be made as a result of
the actual  issuance of the  Convertible  Securities  upon the  exercise of such
rights or options or upon the actual  issuance  of  Additional  Shares of Common
Stock upon the  conversion of such  Convertible  Securities.  The  provisions of
Section 4(i)(C) hereof for the readjustment of the Conversion Price for Series F
Stock upon the  expiration  of rights or options or the rights of  conversion of
Convertible Securities will apply equally to the rights, options and Convertible
Securities referred to in this Section 4(i)(D).

         (j)  Accountants'  Certificate  of  Adjustment.  In  each  case  of  an
adjustment or readjustment  of any Conversion  Price for the number of shares of
Common Stock or other  securities  issuable  upon  conversion  of the  Preferred
Stock, the Corporation,  at its expense, upon the written request of a holder of
Preferred Stock for which the Conversion Price has been so adjusted,  will cause
independent   public   accountants  of  recognized   standing  selected  by  the
Corporation  (who may be the independent  public  accountants  then auditing the
books  of the  Corporation)  to  compute  such  adjustment  or  readjustment  in
accordance with the  provisions  hereof  and prepare a certificate  showing such
adjustment or readjustment, and will mail such certificate, by first class mail,
postage  prepaid,  to such registered  holder of the Preferred Stock, and to all
other holders of the same series of Preferred  Stock, at the holders' address as
shown in the Corporation's books. The certificate will set forth such adjustment
or  readjustment,  showing  in  reasonable  detail  the facts  upon  which  such
adjustment or  readjustment  is based,  including a statement of the  Conversion
Price at the time in effect and the type and amount,  if any, of other  property
which at the time would be received upon  conversion  of the relevant  Preferred
Stock.

         (k) Notices of Record Date. Upon (i) any taking by the Corporation of a
record of the holders of any Series F Stock for the purpose of  determining  the
holders thereof who are entitled to receive any dividend or other  distribution,
or (ii) any capital  reorganization of the Corporation,  any reclassification or
recapitalization  of  the  capital  stock  of the  Corporation,  any  merger  or
consolidation  of the  Corporation  with or into any other  corporation,  or any
transfer  of all or  substantially  all the  assets of the  Company to any other
person or any voluntary or involuntary dissolution, liquidation or winding up of
the  Corporation,  the Corporation will mail to each holder of Series F Stock at
least  thirty  (30) days prior to the  record  date  specified  therein a notice
specifying  (1) the date on which any such record is to be taken for the purpose
of  such  dividend  or  distribution  and a  description  of  such  dividend  or
distribution,  (2) the date on which any such reorganization,  reclassification,
transfer,  consolidation,  merger,  dissolution,  liquidation  or  winding up is
expected to

                                       8

<PAGE>

become  effective,  and (3) the date, if any, that is to be fixed as to when the
holders of record of Common  Stock (or other  securities)  will be  entitled  to
exchange  their shares of Common Stock (or other  securities)  for securities or
other property deliverable upon such reorganization, reclassification, transfer,
consolidation,  merger,  dissolution,  liquidation or winding up;  provided that
such  30-day  notice may be waived by the  written  consent of the holders of at
least a  majority  of the then  outstanding  Series F Stock  and such  waiver if
obtained automatically will be binding upon all holders of Series F Stock.

         (1) Automatic Conversion.

                  (i) Subject to the  provisions  of Section  4(1)(iii)  hereof,
each share of Series F  Stock will be  converted  automatically  into  shares of
Common Stock based on the then effective  Conversion Price for such share,  upon
the earlier of (A) the closing of a firmly underwritten public offering pursuant
to an effective  registration  statement  under the  Securities  Act of 1933, as
amended (a "Registration Statement") covering the offer and sale of Common Stock
for the account of the Corporation at a price per share of at least $4.00,  with
an aggregate offering price for all shares under such Registration  Statement of
at least $3,000,000.00,  (B) at such time as less than 20% of the Series F Stock
issued pursuant to the Corporation's  initial offering of up to 4,000,000 shares
of Series F Stock remains  outstanding  or (C) upon the  voluntary  consent of a
majority  of the voting  power of the then  outstanding  shares of such Series F
Stock.

                  (ii) Automatic  conversion  under Section  4(1)(i) hereof will
be  conditioned  upon  payment by the  Corporation  of all  declared  and unpaid
dividends on the  outstanding  Series F Stock to be converted  and including the
date of such  conversion,  payable  either  in cash  or,  at the  option  of the
Corporation,  Common Stock (valued at the Common Stock's Fair Market Value),  or
both.

                  (iii) Upon the  occurrence  of any of the events  specified in
Section 4(1)(i)  hereof,  the  outstanding  shares of the Series F Stock will be
converted automatically without any further action by the holders of such shares
and whether or not the certificates  representing such shares are surrendered to
the Corporation or its transfer agent;  provided,  however, that the Corporation
will not be  obligated  to issue  certificates  evidencing  the shares of Common
Stock issuable upon such  conversion  unless the  certificates  evidencing  such
shares of Series F Stock are either delivered to the Corporation or its transfer
agent as provided  below, or the holder notifies the Corporation or its transfer
agent that such certificates have been lost, stolen or destroyed and executes an
agreement  satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection with such certificates. Upon the occurrence of
such  automatic  conversion  of the Series F Stock,  the holders of the Series F
Stock will

                                       9

<PAGE>

surrender  the  certificates  representing  such  shares  at the  office  of the
Corporation  or any  transfer  agent  for the  Series F Stock or  Common  Stock.
Thereupon,  there will be issued and  delivered to such holder  promptly at such
office and in its name as shown on such surrendered certificate or certificates,
a  certificate  or  certificates  for the number of shares of Common  Stock into
which the shares of Series F Stock  surrendered  were convertible on the date on
which such automatic conversion occurred.

         (m)  Fractional  Shares.  No fractional  shares of Common Stock will be
issued upon  conversion of Series F Stock.  In lieu of any  fractional  share to
which the holder  would  otherwise be entitled,  the  Corporation  will pay cash
equal to the product of such  fraction  multiplied  by the Common  Stock's  Fair
Market Value on the date of conversion.

         (n) Reservation of Stock Issuable Upon Conversion. The Corporation will
at all times  reserve and keep  available  out of its  authorized  but  unissued
shares of Common Stock,  solely for the purpose of effecting  the  conversion of
the shares of the Series F Stock,  such number of its shares of Common  Stock as
will from time to time be sufficient to effect the conversion of all outstanding
shares  of the  Series F Stock.  If at any time the  number  of  authorized  but
unissued  shares of Common Stock will not be sufficient to effect the conversion
of all then outstanding  shares of the Series F Stock, the Corporation will take
such  corporate  action as may, in the opinion of its  counsel,  be necessary to
increase its  authorized  but unissued  shares of Common Stock to such number of
shares as will be sufficient for such purpose.

         (o) Notices. Any notice required by the provisions of this Section 4 to
be given to or by the  holders  of shares of the  Series F Stock  will be deemed
given upon the earlier of actual  receipt  or  seventy-two  (72) hours after the
same has been  deposited in the United  States mail,  by certified or registered
mail, return receipt requested, postage prepaid, and addressed to each holder of
record at the address of such holder  appearing on the books of the Corporation,
or to the Corporation as to notices from holders.

         (p) Payment of Taxes.  The  Corporation  will pay all taxes (other than
taxes based upon income) and other governmental charges that may be imposed with
respect to the issue or delivery of shares of Common  Stock upon  conversion  of
shares of Series F Stock,  including without  limitation any tax or other charge
imposed in  connection  with any transfer  involved in the issue and delivery of
shares of Common Stock in a name other than that in which the shares of Series F
Stock so converted were registered.

         (q) No  Impairment.  The  Corporation  will not amend its  Articles  of
Incorporation  or  participate  in  any  reorganization,   transfer  of  assets,
consolidation,  merger,  dissolution,  issue or sale of  securities or any other
voluntary action, for the purpose

                                       10

<PAGE>

of  avoiding or seeking to avoid the  observance  or  performance  of any of the
terms to be observed or performed hereunder by the Corporation,  but will at all
times in good faith assist in carrying out all such action as may be  reasonably
necessary  or  appropriate  in order to  protect  the  conversion  rights of the
holders of the Series F Stock against dilution or other impairment.

         5. Voting Rights. Each share of Series F Stock shall entitle the holder
to one (1) vote and with  respect to each such vote a holder of shares of Series
F Stock shall have full voting  rights and powers equal to the voting rights and
powers of a holder of shares of  Common  Stock,  share for  share,  and shall be
entitled to notice of any shareholders' meeting in accordance with the Bylaws of
the  Corporation,  and shall be  entitled to vote with  holders of Common  Stock
together as a single class.

         6.  Redemption   Provisions.   Commencing  on  February  26,  1996  and
continuing  through  November 26, 1996,  any shares of Series F Stock which have
not been converted into Common Stock may be redeemed by the Corporation upon the
payment of $1.25 per share to the holder  thereof  after  giving 30 days written
notice.

         7.  Status of  Converted  or  Reacquired  Stock.  In case any shares of
Series F Convertible  Preferred  Stock shall be converted  pursuant to Section 4
hereof,  or redeemed  pursuant to Section 6 hereof,  the shares so  converted or
redeemed  shall  cease  to be a part  of the  authorized  capital  stock  of the
Corporation.

         8.  Restrictions  and  Limitations.  So long as any  shares of Series F
Stock remain outstanding, the consent of the holders of a majority of the Series
F Stock then outstanding,  voting as a series,  will be required with respect to
any action that:

         (a) involves any merger,  reorganization  or sale by the Corporation of
all or substantially all of its assets, or

         (b)  involves  the  issuance of  Additional  Shares of Common  Stock or
Convertible Securities.

                                       11

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