Document:

AMENDED DESIGNATIONS, PREFERENCES AND RIGHTS OF
                    THE SERIES A CONVERTIBLE PREFERRED STOCK
                                       OF
                                  TECHALT, INC.

                  TechAlt, Inc. (the "COMPANY"), a corporation organized and
existing under the Nevada Revised Statutes (the "NRS"), does hereby certify
that, pursuant to authority conferred upon the Board of Directors of the Company
by the Restated Articles of Incorporation, as amended, of the Company, and
pursuant to Section 78.1955 of the NRS, the Board of Directors of the Company at
a meeting duly held, adopted resolutions (i) authorizing a series of the
Company's previously authorized preferred stock, par value $.001 per share, and
(ii) providing for the designations, preferences and relative, participating,
optional or other rights, and the qualifications, limitations or restrictions
thereof, of Four Million Eight Hundred Twenty Thousand (4,820,000) shares of
Series A Convertible Preferred Stock of the Company, as follows:

                  RESOLVED, that the Company is authorized to issue Four Million
Eight Hundred Twenty Thousand (4,820,000) shares of Series A Convertible
Preferred Stock (the "PREFERRED SHARES"), par value $.001 per share, which shall
have the following powers, designations, preferences and other special rights:

         (1)      (I) Certain Defined Terms. For purposes of this  Certificate
         of  Designations,  the following terms shall have the following
         meanings:

                  (a) "ADDITIONAL AMOUNT" means, on a per Preferred Share basis,
         the sum of (A) unpaid Default Interest through the date of
         determination plus (B) the product of (x) the result of the following
         formula: (0.05) (N/365) and (y) $1.00.

                  (b) "APPROVED STOCK PLAN" means any employee benefit plan
         which has been approved by the Board of Directors of the Company,
         pursuant to which the Company's securities may be issued to employees,
         officers or directors for services provided to the Company.

                  (c) "BLOOMBERG" means Bloomberg Financial Markets.

                  (d) "BUSINESS DAY" means any day other than Saturday, Sunday
         or other day on which commercial banks in The City of New York are
         authorized or required by law to remain closed.

                  (e) "CALENDAR QUARTER" means each of the following periods:
         the period beginning on and including January 1 and ending on and
         including March 31; the period beginning on and including April 1 and
         ending on and including June 30; the period beginning on and including
         July 1 and ending on and including September 30; and the period
         beginning on and including October 1 and ending on and including
         December 31.
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                  (f) "CLOSING BID PRICE" and "CLOSING SALE PRICE" means, for
         any security as of any date, the last closing bid price and last
         closing trade price, respectively, for such security on the Principal
         Market, as reported by Bloomberg, or, if the Principal Market begins to
         operate on an extended hours basis and does not designate the closing
         bid price or the closing trade price, as the case may be, then the last
         bid price or last trade price, respectively, of such security prior to
         4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the
         Principal Market is not the principal securities exchange or trading
         market for such security, the last closing bid price or last trade
         price, respectively, of such security on the principal securities
         exchange or trading market where such security is listed or traded as
         reported by Bloomberg, or if the foregoing do not apply, the last
         closing bid price or last trade price, respectively, of such security
         in the over-the-counter market on the electronic bulletin board for
         such security as reported by Bloomberg, or, if no closing bid price or
         last trade price, respectively, is reported for such security by
         Bloomberg, the average of the bid prices, or the ask prices,
         respectively, of any market makers for such security as reported in the
         "pink sheets" by Pink Sheets LLC (formerly the National Quotation
         Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price
         cannot be calculated for a security on a particular date on any of the
         foregoing bases, the Closing Bid Price or the Closing Sale Price, as
         the case may be, of such security on such date shall be the fair market
         value as mutually determined by the Company and the Required Holders.
         If the Company and the Required Holders are unable to agree upon the
         fair market value of such security, then such dispute shall be resolved
         pursuant to Section 2(c)(iii). All such determinations to be
         appropriately adjusted for any stock dividend, stock split, stock
         combination or other similar transaction during the applicable
         calculation period.

                  (g) "CONVERSION PRICE" means $0.50, subject to adjustment as
         provided herein.

                  (h) "CONVERTIBLE SECURITIES" means any stock or securities
         (other than Options) directly or indirectly convertible into or
         exchangeable or exercisable for Common Stock.

                  (i) "DIVIDEND CALCULATION PRICE" means, with respect to any
         Dividend Date, that price which shall be computed as 90% of the
         arithmetic average of the Weighted Average Prices of the Common Stock
         on each of the five (5) consecutive trading days immediately preceding
         the second trading day immediately preceding such Dividend Date, as
         appropriately adjusted for any stock dividend, stock split, stock
         combination or other similar transaction during such five (5) trading
         day period.

                  (j) "EBITDA" means, for the most recent calendar quarter, the
         net income (or net loss) of the Company and its consolidated
         subsidiaries, determined in accordance with United States generally
         accepted accounting principles, consistently applied, plus (i) any
         provision for (or less any benefit from) income taxes, (ii) any
         deduction for interest expense, net of interest income, and (iii)
         depreciation and amortization expense. All determinations of the
         components of EBITDA shall be derived from the Company's then most
         recently filed Annual Report on Form 10-K or 10-KSB, as applicable, or
         Quarterly Report on Form 10-Q or 10QSB, as applicable.

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                  (k) "EQUITY CONDITIONS" means: (i) on each day during the
         period beginning six (6) months prior to the applicable date of
         determination and ending on and including the applicable date of
         determination (the "EQUITY CONDITIONS MEASURING PERIOD"), either (x)
         the Registration Statement filed pursuant to the Registration Rights
         Agreement shall be effective and available for the resale of all
         remaining Registrable Securities (as defined in the Registration Rights
         Agreement) in accordance with the terms of the Registration Rights
         Agreement and there shall not have been any Grace Periods (as defined
         in the Registration Rights Agreement) or (y) all shares of Common Stock
         issuable upon conversion of the Preferred Shares or as Dividend Shares
         shall be eligible for sale without restriction and without the need for
         registration under any applicable federal or state securities laws;
         (ii) the Company shall have no knowledge of any fact that would cause
         (x) the Registration Statements required pursuant to the Registration
         Rights Agreement not to be effective and available for the resale of
         all remaining Registrable Securities in accordance with the terms of
         the Registration Rights Agreement or (y) any shares of Common Stock
         issuable upon conversion of the Preferred Shares or as Dividend Shares
         not to be eligible for sale without restriction pursuant to Rule 144(k)
         and any applicable state securities laws; (iii) on each day during the
         Equity Conditions Measuring Period, the shares of Common Stock are
         designated for quotation on the Principal Market and shall not have
         been suspended from trading on such exchange or market (other than
         suspensions of not more than two days and occurring prior to the
         applicable date of determination due to business announcements by the
         Company) nor shall delisting or suspension by such exchange or market
         been threatened or pending either (A) in writing by such exchange or
         market or (B) by falling below the minimum listing maintenance
         requirements of such exchange or market; (iv) during the Equity
         Conditions Measuring Period, the Company shall have delivered
         Conversion Shares and Warrant Shares (as defined in the Securities
         Purchase Agreement) and other shares of Common Stock issuable upon
         conversion of the Preferred Shares and exercise of the Warrants to the
         holders on a timely basis; (v) any applicable shares of Common Stock to
         be issued in connection with the event requiring determination may be
         issued in full without violating Section 4 hereof and any other rules
         or regulations of the Principal Market; (vi) during the Equity
         Conditions Measuring Period, there shall not have occurred the public
         announcement of a pending, proposed or intended Fundamental Transaction
         which has not been abandoned, terminated or consummated; and (vii) the
         Company otherwise shall have been in material compliance with and shall
         not have materially breached any provision, covenant, representation or
         warranty of any Transaction Document (as defined in the Securities
         Purchase Agreement).

                  (l) "ELIGIBLE MARKET" means the Principal Market, The New York
         Stock Exchange, Inc., the Nasdaq National Market or The Nasdaq SmallCap
         Market.

                  (m) "EXCLUDED SECURITIES" means shares of Common Stock issued
         or deemed to be issued in accordance with Section 2(e) hereof by the
         Company: (i) pursuant to an Approved Stock Plan; (ii) upon issuance of
         the Preferred Shares or upon conversion of the Preferred Shares or as
         Dividend Shares; (iii) upon exercise of the Warrants; and (iv) issued
         upon exercise of Options or Convertible Securities which are
         outstanding on the date immediately preceding the Issuance Date,
         provided that such issuance of shares of Common Stock upon exercise of
         such Options or Convertible Securities is made pursuant to the terms of
         such Options or Convertible Securities in effect on the date
         immediately preceding the Issuance Date and such Options or Convertible
         Securities are not amended after the date immediately preceding the
         Issuance Date.

                                      -3-
<PAGE>

                  (n) "FUNDAMENTAL TRANSACTION" means that the Company shall,
         directly or indirectly, in one or more related transactions, (i)
         consolidate or merge with or into (whether or not the Company is the
         surviving corporation) another Person, or (ii) sell, assign, transfer,
         convey or otherwise dispose of all or substantially all of the
         properties or assets of the Company to another Person, or (iii) allow
         another Person to make a purchase, tender or exchange offer that is
         accepted by the holders of more than the 50% of the outstanding shares
         of Common Stock (not including any shares of Common Stock held by the
         Person or Persons making or party to, or associated or affiliated with
         the Persons making or party to, such purchase, tender or exchange
         offer), or (iv) consummate a stock purchase agreement or other business
         combination (including, without limitation, a reorganization,
         recapitalization, spin-off or scheme of arrangement) with another
         Person whereby such other Person acquires more than the 50% of the
         outstanding shares of Common Stock (not including any shares of Common
         Stock held by the other Person or other Persons making or party to, or
         associated or affiliated with the other Persons making or party to,
         such stock purchase agreement or other business combination), or (v)
         reorganize, recapitalize or reclassify its Common Stock.

                  (o) "ISSUANCE DATE" means the first date on which Preferred
         Shares are issued pursuant to the Securities Purchase Agreement.

                  (p) "N" means the number of days from, but excluding, the last
         Dividend Date with respect to which dividends, along with any Default
         Interest, have been paid by the Company on the applicable Preferred
         Share, or the Issuance Date if no Dividend Date has occurred, through
         and including the date of determination for such Preferred Share for
         which such determination is being made.

                  (q) "OPTIONS" means any rights, warrants or options to
         subscribe for or purchase Common Stock or Convertible Securities.

                  (r) "PARENT ENTITY" of a Person means an entity that, directly
         or indirectly, controls the applicable Person and whose common stock or
         equivalent equity security is quoted or listed on an Eligible Market,
         or, if there is more than one such Person or Parent Entity, the Person
         or Parent Entity with the largest public market capitalization as of
         the date of consummation of the Fundamental Transaction.

                  (s) "PERSON" means an individual, a limited liability company,
         a partnership, a joint venture, a corporation, a trust, an
         unincorporated organization and a government or any department or
         agency thereof.

                  (t) "PRINCIPAL MARKET" means the principal exchange or market
         on which the Common Stock is listed and trades, which initially is the
         OTC Bulletin Board.

                                      -4-
<PAGE>

                  (u) "REGISTRATION RIGHTS AGREEMENT" means that certain
         registration rights agreement by and among the Company and the initial
         holders of the Preferred Shares relating to the filing of a
         Registration Statement (as defined in such agreement) covering the
         resale of the shares of Common Stock issuable upon conversion of and as
         Dividend Shares on the Preferred Shares and exercise of the Warrants,
         as such agreement may be amended from time to time as provided in such
         agreement.

                  (v) "REQUIRED HOLDERS" means the holders of the Preferred
         Shares representing at least a majority of the shares of Common Stock
         underlying the Preferred Shares then outstanding.

                  (w) "SECURITIES PURCHASE AGREEMENT" means that certain
         securities purchase agreement by and among the Company and the initial
         holders of the Preferred Shares, as such agreement may be amended from
         time to time as provided in such agreement.

                  (x) "STATED VALUE" means $1.00.

                  (y) "SUCCESSOR ENTITY" means the Person, which may be the
         Company, formed by, resulting from or surviving any Fundamental
         Transaction or the Person with which such Fundamental Transaction shall
         have been made, provided that if such Person is not a publicly traded
         entity whose common stock or equivalent equity security is quoted or
         listed for trading on an Eligible Market, Successor Entity shall mean
         such Person's Parent Entity.

                  (z) "WARRANTS" means the warrants to purchase shares of Common
         Stock issued by the Company pursuant to the Securities Purchase
         Agreement.

                  (aa) "WEIGHTED AVERAGE PRICE" means, for any security as of
         any date, the dollar volume-weighted average price for such security on
         the Principal Market during the period beginning at 9:30:01 a.m., New
         York Time (or such other time as the Principal Market publicly
         announces is the official open of trading), and ending at 4:00:00 p.m.,
         New York Time (or such other time as the Principal Market publicly
         announces is the official close of trading) as reported by Bloomberg
         through its "Volume at Price" functions, or, if the foregoing does not
         apply, the dollar volume-weighted average price of such security in the
         over-the-counter market on the electronic bulletin board for such
         security during the period beginning at 9:30:01 a.m., New York Time (or
         such other time as such market publicly announces is the official open
         of trading), and ending at 4:00:00 p.m., New York Time (or such other
         time as such market publicly announces is the official close of
         trading) as reported by Bloomberg, or, if no dollar volume-weighted
         average price is reported for such security by Bloomberg for such
         hours, the average of the highest closing bid price and the lowest
         closing ask price of any of the market makers for such security as
         reported in the "pink sheets" by Pink Sheets LLC (formerly the National
         Quotation Bureau, Inc.). If the Weighted Average Price cannot be
         calculated for a security on a particular date on any of the foregoing
         bases, the Weighted Average Price of such security on such date shall
         be the fair market value as mutually determined by the Company and the
         Holder. If the Company and the Holder are unable to agree upon the fair
         market value of such security, then such dispute shall be resolved
         pursuant to Section 2(c)(iii). All such determinations to be
         appropriately adjusted for any stock dividend, stock split, stock
         combination or other similar transaction during the applicable
         calculation period.

                                      -5-
<PAGE>

                  (II) Dividends. The holders of the Preferred Shares shall be
         entitled to receive dividends ("DIVIDENDS") at a rate of 5.0% per annum
         (the "DIVIDEND RATE"), which shall be cumulative, accumulate daily from
         the Issuance Date and be due and payable beginning on October 1, 2004
         (the "FIRST DIVIDEND DATE") and on the first day of each Calendar
         Quarter after the First Dividend Date (each, including the First
         Dividend Date, a "DIVIDEND DATE"). If a Dividend Date is not a Business
         Day, then the Dividend shall be due and payable on the Business Day
         immediately following such Dividend Date. Dividends shall be payable in
         cash, or, at the option of the Company, in shares of Common Stock
         ("DIVIDEND SHARES"), provided that the Dividends which accumulated
         during any period shall be payable as Dividend Shares only if the
         Company provides written notice to each holder of Preferred Shares at
         least ten (10) Business Days prior to the Dividend Date (the "DIVIDEND
         NOTICE DATE"). Dividends to be paid in Dividend Shares shall be paid in
         a number of fully paid and nonassessable shares (rounded up to the
         nearest whole share) of Common Stock equal to the quotient of (a) the
         Additional Amount divided by (b) the Dividend Calculation Price. If any
         Dividend Shares are to be paid on a Dividend Date, then the Company
         shall (X) provided that the Company's transfer agent (the "TRANSFER
         AGENT") is participating in the Depository Trust Company ("DTC") Fast
         Automated Securities Transfer Program, upon the request of such holder,
         credit such aggregate number of Dividend Shares to which such holder
         shall be entitled to such holder's or its designee's balance account
         with DTC through its Deposit Withdrawal Agent Commission system, or (Y)
         issue and deliver on the applicable Dividend Date, to each holder of
         Preferred Shares at such address as specified by such holder in writing
         to the Company at least two Business Days prior to the applicable
         Dividend Date, a certificate, registered in the name of such holder or
         its designee, for the number of Dividend Shares to which such holder
         shall be entitled. Notwithstanding the foregoing, the Company shall not
         be entitled to pay Dividends in shares of Common Stock and shall be
         required to pay such Dividends in cash if the Equity Conditions are not
         satisfied (or waived by the Holder) from and including the Dividend
         Notice Date through and including the applicable Dividend Date. Any
         accumulated and unpaid cash Dividend Payments which are not paid within
         five (5) Business Days of such accumulated and unpaid Dividends'
         Dividend Date shall bear interest at the rate of 15.0% per annum from
         such Dividend Date until the same is paid in full (the "DEFAULT
         INTEREST"). Notwithstanding any other provision in this Certificate of
         Designations to the contrary, no Dividends shall be required to be paid
         by the Company subsequent to the first fiscal quarter in which the
         Company has EBITDA of One Million Dollars ($1,000,000) or more.

            (2)   Conversion of Preferred Shares. Preferred Shares shall be
convertible into shares of the Company's Common Stock, par value $.001 per share
(the "COMMON STOCK"), on the terms and conditions set forth in this Section 2.

                                      -6-
<PAGE>

                  (a) Holder's Conversion Right. Subject to the provisions of
         Section 4, at any time or times on or after the Issuance Date, any
         holder of Preferred Shares shall be entitled to convert any whole or
         fractional number of Preferred Shares into fully paid and nonassessable
         shares of Common Stock in accordance with Section 2(c) at the
         Conversion Rate (as defined below). The Company shall not issue any
         fraction of a share of Common Stock upon any conversion. All shares of
         Common Stock (including fractions thereof) issuable upon conversion of
         more than one Preferred Share by a holder thereof shall be aggregated
         for purposes of determining whether the conversion would result in the
         issuance of a fraction of a share of Common Stock. If, after the
         aforementioned aggregation, the issuance would result in the issuance
         of a fraction of a share of Common Stock, the Company shall round such
         fraction of a share of Common Stock up to the nearest whole share.

                  (b) Conversion. The number of shares of Common Stock issuable
         upon conversion of each Preferred Share pursuant to Section 2 shall be
         determined according to the following formula (the "CONVERSION RATE"):

                                  Stated Value
                                Conversion Price

                  (c) Mechanics of Conversion. The conversion of Preferred
         Shares shall be conducted in the following manner:

                          (i)    Holder's Delivery Requirements. To convert
         Preferred Shares into shares of Common Stock on any date (the
         "CONVERSION DATE"), the holder thereof shall (A) transmit by facsimile
         (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York
         City Time, on such date, a copy of an executed notice of conversion in
         the form attached hereto as Exhibit I (the "CONVERSION NOTICE") to the
         Company and the Transfer Agent and (B) if required by Section
         2(c)(vii), surrender to a common carrier for delivery to the Company as
         soon as practicable following such date the original certificates
         representing the Preferred Shares being converted (or an
         indemnification undertaking with respect to such shares in the case of
         their loss, theft or destruction) (the "PREFERRED STOCK CERTIFICATES").

                          (ii)   Company's Response. Upon receipt by the Company
         of a copy of a Conversion Notice, the Company shall (A) as soon as
         practicable, but in any event within one (1) Business Day, send, via
         facsimile, a confirmation of receipt of such Conversion Notice to such
         holder and the Transfer Agent, which confirmation shall constitute an
         instruction to the Transfer Agent to process such Conversion Notice in
         accordance with the terms herein and (B) on or before the second (2nd)
         Business Day following the date of receipt by the Company of such
         Conversion Notice (the "SHARE DELIVERY DATE"), (I) if the Transfer
         Agent is participating in the DTC Fast Automated Securities Transfer
         program, the Company shall cause the Transfer Agent to promptly
         electronically transmit the Common Stock issuable upon conversion to
         the holder by crediting the account of the holder or its nominee with
         DTC through its Deposit Withdrawal Agent Commission system or (II)
         issue and deliver to the address as specified in the Conversion Notice,
         a certificate, registered in the name of the holder or its designee,
         for the number of shares of Common Stock to which the holder shall be
         entitled. If the number of Preferred Shares represented by the
         Preferred Stock Certificate(s) submitted for conversion, as may be
         required pursuant to Section 2(c)(vii), is greater than the number of
         Preferred Shares being converted, then the Company shall, as soon as
         practicable and in no event later than three (3) Business Days after
         receipt of the Preferred Stock Certificate(s) (the "PREFERRED STOCK
         DELIVERY DATE") and at its own expense, issue and deliver to the holder
         a new Preferred Stock Certificate representing the number of Preferred
         Shares not converted.

                                      -7-
<PAGE>

                          (iii)  Dispute Resolution. In the case of a dispute as
         to the determination of the Conversion Price or the arithmetic
         calculation of the Conversion Rate, the Company shall instruct the
         Transfer Agent to issue to the holder the number of shares of Common
         Stock that is not disputed and shall transmit an explanation of the
         disputed determinations or arithmetic calculations to the holder via
         facsimile (the "DISPUTE NOTICE") within one (1) Business Day of receipt
         of such holder's Conversion Notice or other date of determination. If
         such holder and the Company are unable to agree upon the determination
         of the Conversion Price or arithmetic calculation of the Conversion
         Rate within two (2) Business Days of such Dispute Notice, then the
         Company shall within one (1) Business Day submit via facsimile (A) the
         disputed determination of the Conversion Price to an independent,
         reputable investment bank selected by the Company and approved by the
         Required Holders or (B) the disputed arithmetic calculation of the
         Conversion Rate to the Company's independent, outside accountant. The
         Company shall cause, at the Company's expense, the investment bank or
         the accountant, as the case may be, to perform the determinations or
         calculations and notify the Company and the holder of the results no
         later than two (2) Business Days from the time it receives the disputed
         determinations or calculations. Such investment bank's or accountant's
         determination or calculation, as the case may be, shall be binding upon
         all parties absent manifest error.

                          (iv)   Record Holder. The Person or Persons entitled
         to receive the shares of Common Stock issuable upon a conversion of
         Preferred Shares shall be treated for all purposes as the record holder
         or holders of such shares of Common Stock on the Conversion Date.

                          (v)    Company's Failure to Timely Convert.

                                 (A)  Cash Damages. Subject to Section 4, if the
         Company shall fail for any reason or for no reason to issue within five
         Business Days of the Conversion Date, a certificate for the number of
         shares of Common Stock to which the holder is entitled or to credit the
         holder's balance account with DTC for such number of shares of Common
         Stock to which the holder is entitled upon the holder's conversion of
         the Preferred Shares, the Company shall pay as damages in cash to such
         holder on each day after such fifth Business Day that the issuance of
         such Common Stock is not timely effected an amount equal to 1.0% of the
         product of (A) the sum of the number of shares of Common Stock not
         issued to the holder on a timely basis and to which the holder is
         entitled and (B) the Closing Sale Price of the Common Stock on the
         trading day immediately preceding the last possible date which the
         Company could have issued such Common Stock to the holder without
         violating Section 2(c). In addition to any other rights available to a
         holder and the foregoing provisions, if the Company fails to deliver or
         cause to be delivered to the holder a certificate for the number of
         shares of Common Stock to which the holder is entitled or to credit

<PAGE>

         the holder's balance account with DTC for such number of shares of
         Common Stock to which the holder is entitled upon the holder's
         conversion of the Preferred Shares by the Business Day after the date
         on which delivery of such certificate is required hereby, and if on or
         after such Business Day the holder purchases (in an open market
         transaction or otherwise) shares of Common Stock to deliver in
         satisfaction of a sale by the holder of the shares that the holder
         anticipated receiving from the Company (a "BUY-IN"), then the Company
         shall, within three Business Days after the holder's request and in the
         holder's discretion, either (i) pay cash to the holder in an amount
         equal to the holder's total purchase price (including brokerage
         commissions, if any) for the shares of Common Stock so purchased, at
         which point the Company's obligation to deliver such certificate (and
         to issue such shares of Common Stock) shall terminate, or (ii) promptly
         honor its obligation to deliver to the holder a certificate or
         certificates representing such shares of Common Stock (the "BUY-IN
         SHARES") and pay cash to the holder in an amount equal to the product
         of (A) the number of Buy-In Shares, times (B) the excess (if any) of
         the Closing Sale Price on the date of the Buy-In over the Closing Sale
         Price on the date of delivery of the Buy-In Shares.

                                 (B)  Void Conversion Notice. If for any reason
         a holder has not received all of the shares of Common Stock to which
         such holder is entitled prior to the tenth (10th) Business Day after
         the Share Delivery Date with respect to a conversion of Preferred
         Shares, then the holder, upon written notice to the Company, with a
         copy to the Transfer Agent, may void its Conversion Notice with respect
         to, and retain or have returned, as the case may be, any Preferred
         Shares that have not been converted pursuant to such holder's
         Conversion Notice; provided that the voiding of a holder's Conversion
         Notice shall not affect the Company's obligations to make any payments
         which have accrued prior to the date of such notice pursuant to Section
         2(c)(v)(A) or otherwise.

                          (vi)   Pro Rata Conversion. Subject to Section 4(b),
         in the event the Company receives a Conversion Notice from more than
         one holder of Preferred Shares for the same Conversion Date and the
         Company can convert some, but not all, of such Preferred Shares, the
         Company shall convert from each holder of Preferred Shares electing to
         have Preferred Shares converted at such time a pro rata amount of such
         holder's Preferred Shares submitted for conversion based on the number
         of Preferred Shares submitted for conversion on such date by such
         holder relative to the number of Preferred Shares submitted for
         conversion on such date.

                          (vii)  Book-Entry.  Notwithstanding anything to the
         contrary set forth herein, upon conversion of Preferred Shares in
         accordance with the terms hereof, the holder thereof shall not be
         required to physically surrender the certificate representing the
         Preferred Shares to the Company unless the full or remaining number of
         Preferred Shares represented by the certificate are being converted.
         The holder and the Company shall maintain records showing the number of
         Preferred Shares so converted and the dates of such conversions or
         shall use such other method, reasonably satisfactory to the holder and
         the Company, so as not to require physical surrender of the certificate
         representing the Preferred Shares upon each such conversion. In the
         event of any dispute or discrepancy, such records of the Company
         establishing the number of Preferred Shares to which the record holder

                                      -9-
<PAGE>

         is entitled shall be controlling and determinative in the absence of
         manifest error. Notwithstanding the foregoing, if Preferred Shares
         represented by a certificate are converted as aforesaid, the holder may
         not transfer the certificate representing the Preferred Shares unless
         the holder first physically surrenders the certificate representing the
         Preferred Shares to the Company, whereupon the Company will forthwith
         issue and deliver upon the order of the holder a new certificate of
         like tenor, registered as the holder may request, representing in the
         aggregate the remaining number of Preferred Shares represented by such
         certificate. The holder and any assignee, by acceptance of a
         certificate, acknowledge and agree that, by reason of the provisions of
         this paragraph, following conversion of any Preferred Shares, the
         number of Preferred Shares represented by such certificate may be less
         than the number of Preferred Shares stated on the face thereof. Each
         certificate for Preferred Shares shall bear the following legend:

                  ANY TRANSFEREE OF THIS CERTIFICATE SHOULD CAREFULLY
                  REVIEW THE TERMS OF THE COMPANY'S CERTIFICATE OF
                  DESIGNATIONS RELATING TO THE PREFERRED SHARES
                  REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION
                  2(c)(vii) THEREOF. THE NUMBER OF PREFERRED SHARES
                  REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE
                  NUMBER OF PREFERRED SHARES STATED ON THE FACE HEREOF
                  PURSUANT TO SECTION 2(c)(vii) OF THE CERTIFICATE OF
                  DESIGNATIONS RELATING TO THE PREFERRED SHARES
                  REPRESENTED BY THIS CERTIFICATE.

                  (d)     Taxes. The Company shall pay any and all documentary,
         stamp, transfer and other similar taxes that may be payable with
         respect to the issuance and delivery of Common Stock upon the
         conversion of Preferred Shares.

                  (e)     Adjustments to Conversion Price. The Conversion Price
         will be subject to adjustment from time to time as provided in this
         Section 2(e).

                          (i) Adjustment of Conversion Price upon Issuance of
         Common Stock. If and whenever on or after the Issuance Date and while
         any Preferred Shares are outstanding, the Company issues or sells, or
         in accordance with this Section 2(e) is deemed to have issued or sold,
         any shares of Common Stock (including the issuance or sale of shares of
         Common Stock owned or held by or for the account of the Company but
         excluding Excluded Securities) for a consideration per share (the "NEW
         SECURITIES ISSUANCE PRICE") less than a price equal to the Conversion
         Price in effect immediately prior to such time (the "APPLICABLE PRICE")
         (the foregoing, a "DILUTIVE ISSUANCE"), then immediately after such
         issue or sale, the Conversion Price then in effect shall be reduced to
         an amount equal to the New Securities Issuance Price. For purposes of
         determining the adjusted Conversion Price under this Section 2(e)(i),
         the following shall be applicable:

                                      -10-
<PAGE>

                                 (A)  Issuance of Options. If the Company in any
         manner grants or sells any Options (not including Excluded Securities)
         and the lowest price per share for which one share of Common Stock is
         issuable upon the exercise of any such Option or upon conversion,
         exchange or exercise of any Convertible Securities issuable upon
         exercise of such Option is less than the Applicable Price, then such
         share of Common Stock shall be deemed to be outstanding and to have
         been issued and sold by the Company at the time of the granting or sale
         of such Option for such price per share. For purposes of this Section
         2(e)(i)(A), the "lowest price per share for which one share of Common
         Stock is issuable upon the exercise of any such Option or upon
         conversion, exchange or exercise of any Convertible Securities issuable
         upon exercise of such Option" shall be equal to the sum of the lowest
         amounts of consideration (if any) received or receivable by the Company
         with respect to any one share of Common Stock upon granting or sale of
         the Option, upon exercise of the Option and upon conversion, exchange
         or exercise of any Convertible Security issuable upon exercise of such
         Option. No further adjustment of the Conversion Price shall be made
         upon the actual issuance of such Common Stock or of such Convertible
         Securities upon the exercise of such Options or upon the actual
         issuance of such Common Stock upon conversion, exchange or exercise of
         such Convertible Securities.

                                 (B)  Issuance of Convertible Securities. If the
         Company in any manner issues or sells any Convertible Securities (not
         including Excluded Securities) and the lowest price per share for which
         one share of Common Stock is issuable upon such conversion, exchange or
         exercise thereof is less than the Applicable Price, then such share of
         Common Stock shall be deemed to be outstanding and to have been issued
         and sold by the Company at the time of the issuance of sale of such
         Convertible Securities for such price per share. For the purposes of
         this Section 2(e)(i)(B), the "lowest price per share for which one
         share of Common Stock is issuable upon such conversion, exchange or
         exercise" shall be equal to the sum of the lowest amounts of
         consideration (if any) received or receivable by the Company with
         respect to any one share of Common Stock upon the issuance or sale of
         the Convertible Security and upon the conversion, exchange or exercise
         of such Convertible Security. No further adjustment of the Conversion
         Price shall be made upon the actual issuance of such Common Stock upon
         conversion, exchange or exercise of such Convertible Securities, and if
         any such issue or sale of such Convertible Securities is made upon
         exercise of any Options for which adjustment of the Conversion Price
         had been or are to be made pursuant to other provisions of this Section
         2(e)(i), no further adjustment of the Conversion Price shall be made by
         reason of such issue or sale.

                                 (C)  Change in Option Price or Rate of
         Conversion. If the purchase or exercise price provided for in any
         Options (not including Excluded Securities), the additional
         consideration, if any, payable upon the issue, conversion, exchange or
         exercise of any Convertible Securities (not including Excluded
         Securities), or the rate at which any Convertible Securities (not
         including Excluded Securities) are convertible into or exchangeable or

                                      -11-
<PAGE>

         exercisable for Common Stock changes at any time, the Conversion Price
         in effect at the time of such change shall be adjusted to the
         Conversion Price which would have been in effect at such time had such
         Options or Convertible Securities provided for such changed purchase
         price, additional consideration or changed conversion rate, as the case
         may be, at the time initially granted, issued or sold. For purposes of
         this Section 2(e)(i)(C), if the terms of any Option or Convertible
         Security that was outstanding as of the date of issuance of the
         Preferred Shares 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. No adjustment shall be made if such adjustment would result in
         an increase of the Conversion Price then in effect.

                                 (D)  Calculation of Consideration Received. In
         case any Option is issued in connection with the issue or sale of other
         securities of the Company, together comprising one integrated
         transaction in which no specific consideration is allocated to such
         Options by the parties thereto, the Options will be deemed to have been
         issued for a consideration of $0.01. If any Common Stock, Options or
         Convertible Securities are issued or sold or deemed to have been issued
         or sold for cash, the consideration received therefor will be deemed to
         be the gross amount received by the Company therefor. If any Common
         Stock, Options or Convertible Securities are issued or sold for a
         consideration other than cash, the amount of the consideration other
         than cash received by the Company will be the fair value of such
         consideration, except where such consideration consists of marketable
         securities, in which case the amount of consideration received by the
         Company will be the arithmetic average of the Closing Sale Prices of
         such securities during the ten (10) consecutive trading days ending on
         the date of receipt of such securities. The fair value of any
         consideration other than cash or securities will be determined jointly
         by the Company and the holders of at least a majority of the Preferred
         Shares then outstanding. If the Required Holders and the Company are
         unable to reach agreement within ten days after the occurrence of an
         event requiring valuation (the "VALUATION EVENT"), the fair value of
         such consideration will be determined within fifteen Business Days
         after the tenth day following the Valuation Event by an independent,
         reputable appraiser jointly selected by the Company and the Required
         Holders. The determination of such appraiser shall be final and binding
         upon all parties absent manifest error and the fees and expenses of
         such appraiser shall be borne by the Company.

                                 (E)  Record Date. If the Company takes a record
         of the holders of Common Stock for the purpose of entitling them (I) to
         receive a dividend or other distribution payable in Common Stock,
         Options or Convertible Securities or (II) to subscribe for or purchase
         Common Stock, Options or Convertible Securities, then such record date
         will 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 the making of such other distribution or the date of
         the granting of such right of subscription or purchase, as the case may
         be.

                                      -12-
<PAGE>

                          (ii)   Adjustment of Conversion Price upon Subdivision
         or Combination of Common Stock. If the Company at any time subdivides
         (by any stock split, stock dividend, recapitalization or otherwise) its
         outstanding shares of Common Stock into a greater number of shares, the
         Conversion Price in effect immediately prior to such subdivision will
         be proportionately reduced. If the Company at any time combines (by
         combination, reverse stock split or otherwise) its outstanding shares
         of Common Stock into a smaller number of shares and the Conversion
         Price in effect immediately prior to such combination will be
         proportionately increased.

                          (iii)  Other Events. If any event occurs of the type
         contemplated by the provisions of this Section 2(e) but not expressly
         provided for by such provisions, then the Company's Board of Directors
         will make an appropriate adjustment in the Conversion Price so as to
         protect the rights of the holders of the Preferred Shares; provided
         that no such adjustment will increase the Conversion Price as otherwise
         determined pursuant to this Section 2(e).

                          (iv)   Notices.

                                 (A)  Immediately upon any adjustment of the
         Conversion Price pursuant to this Section 2(e), the Company will give
         written notice thereof to each holder of Preferred Shares, setting
         forth in reasonable detail, and certifying, the calculation of such
         adjustment.

                                 (B)  The Company will give written notice to
         each holder of Preferred Shares at least ten (10) Business Days prior
         to the date on which the Company closes its books or takes a record (I)
         with respect to any dividend or distribution upon the Common Stock,
         (II) with respect to any pro rata subscription offer to holders of
         Common Stock or (III) for determining rights to vote with respect to
         any Fundamental Transaction, dissolution or liquidation, provided that
         such information shall be made known to the public prior to or in
         conjunction with such notice being provided to such holder.

                                 (C)  The Company will also give written notice
         to each holder of Preferred Shares at least ten (10) Business Days
         prior to the date on which any Fundamental Transaction, dissolution or
         liquidation will take place, provided that such information shall be
         made known to the public prior to or in conjunction with such notice
         being provided to such holder.

            (3)   Other Rights of Holders.

                  (a)     Fundamental Transactions. The Company shall not enter
         into or be party to a Fundamental Transaction unless (i) the Successor
         Entity assumes in writing all of the obligations of the Company under
         this Certificate of Designations and the other Transaction Documents in
         accordance with the provisions of this Section 3(a) pursuant to written
         agreements in form and substance satisfactory to the Required Holders
         and approved by the Required Holders prior to such Fundamental
         Transaction, including agreements to deliver to each holder of
         Preferred Shares in exchange for such Preferred Shares a security of

                                      -13-
<PAGE>

         the Successor Entity evidenced by a written instrument substantially
         similar in form and substance to the Preferred Shares and this
         Certificate of Designations, including, without limitation, having a
         conversion price equal to the Conversion Price hereunder and having
         similar ranking to the Preferred Shares, and satisfactory to the
         Required Holders and (ii) the Successor Entity (including its Parent
         Entity) is a publicly traded corporation whose common stock is quoted
         on or listed for trading on an Eligible Market. Upon the occurrence of
         any Fundamental Transaction, the Successor Entity shall succeed to, and
         be substituted for (so that from and after the date of such Fundamental
         Transaction, the provisions of this Certificate of Designations
         referring to the "Company" shall refer instead to the Successor
         Entity), and may exercise every right and power of the Company and
         shall assume all of the obligations of the Company under this
         Certificate of Designations with the same effect as if such Successor
         Entity had been named as the Company herein. Upon consummation of the
         Fundamental Transaction, the Successor Entity shall deliver to the
         holders of Preferred Shares confirmation that there shall be issued
         upon conversion of the Preferred Shares at any time after the
         consummation of the Fundamental Transaction, in lieu of the shares of
         the Company's Common Stock (or other securities, cash, assets or other
         property) purchasable upon the conversion of the Preferred Shares prior
         to such Fundamental Transaction, such shares of stock, securities,
         cash, assets or any other property whatsoever (including warrants or
         other purchase or subscription rights) which the holder of Preferred
         Shares would have been entitled to receive upon the happening of such
         Fundamental Transaction had the Preferred Shares been converted
         immediately prior to such Fundamental Transaction. The provisions of
         this Section shall apply similarly and equally to successive
         Fundamental Transactions and shall be applied without regard to any
         limitations on the conversion of the Preferred Shares.

                  (b)     Purchase Rights. If at any time the Company 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 the holders of Preferred Shares will 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 Common Stock acquirable upon complete
         conversion of the Preferred Shares (without taking into account any
         limitations or restrictions on the convertibility of the Preferred
         Shares) 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.

            (4)   Limitation on Beneficial Ownership. The Company shall not
         effect and shall have no obligation to effect any conversion of
         Preferred Shares, and no holder of Preferred Shares shall have the
         right to convert any Preferred Shares, to the extent that after giving
         effect to such conversion, the beneficial owner of such shares
         (together with such Person's affiliates) would have acquired, through
         conversion of Preferred Shares or otherwise, beneficial ownership of a
         number of shares of Common Stock that exceeds 9.99% of the number of
         shares of Common Stock outstanding immediately after giving effect to
         such conversion. For purposes of the foregoing sentence, the number of

                                      -14-
<PAGE>

         shares of Common Stock beneficially owned by a Person and its
         affiliates shall include the number of shares of Common Stock issuable
         upon conversion of the Preferred Shares with respect to which the
         determination of such sentence is being made, but shall exclude the
         number of shares of Common Stock which would be issuable upon (A)
         conversion of the remaining, nonconverted Preferred Shares beneficially
         owned by such Person or any of its affiliates and (B) exercise or
         conversion of the unexercised or unconverted portion of any other
         securities of the Company (including, without limitation, any warrants)
         subject to a limitation on conversion or exercise analogous to the
         limitation contained herein beneficially owned by such Person or any of
         its affiliates. Except as set forth in the preceding sentence, for
         purposes of this Section 4(a), beneficial ownership shall be calculated
         in accordance with Section 13(d) of the Securities Exchange Act of
         1934, as amended. For purposes of this Section 4(a), in determining the
         number of outstanding shares of Common Stock, a holder may rely on the
         number of outstanding shares of Common Stock as reflected in (1) the
         Company's most recent Form 10-Q or 10-QSB, as applicable, Form 10-K or
         10-KSB, as applicable, or other public filing with the SEC, as the case
         may be, (2) a more recent public announcement by the Company, or (3)
         any other notice by the Company or its transfer agent setting forth the
         number of shares of Common Stock outstanding. Upon the written request
         of any holder, the Company shall promptly, but in no event later than
         one (1) Business Day following the receipt of such notice, confirm in
         writing to any such holder the number of shares of Common Stock then
         outstanding. In any case, the number of outstanding shares of Common
         Stock shall be determined after giving effect to conversions of
         Preferred Shares and exercise of the Warrants by such holder and its
         affiliates since the date as of which such number of outstanding shares
         of Common Stock was reported.

            (5)   Company's Right of Mandatory Conversion.

                  (a)     Mandatory Conversion. If at any time from and after
         the Issuance Date, (i) EBITDA equals or exceeds $1,000,000 (the "EBITDA
         REQUIREMENT") and (ii) the Equity Conditions shall have been satisfied
         or waived in writing by the Required Holders from and including the
         Mandatory Conversion Notice Date through and including the Mandatory
         Conversion Date (each, as defined below), the Company shall have the
         right to require each holder of the Preferred Shares to convert all or
         any portion of the Preferred Shares then outstanding as designated in
         the Mandatory Conversion Notice into fully paid, validly issued and
         nonassessable shares of Common Stock in accordance with the terms
         hereof at the Conversion Rate as of the Mandatory Conversion Date (a
         "MANDATORY CONVERSION"). The Company may exercise its right to require
         conversion under this Section 5(a) by delivering within not more than
         two Trading Days following the satisfaction of the EBITDA Requirement a
         written notice thereof by facsimile and overnight courier to all, but
         not less than all, of the holders of Preferred Shares and the Transfer
         Agent (the "MANDATORY CONVERSION NOTICE" and the date all of the
         holders received such notice is referred to as the "MANDATORY
         CONVERSION NOTICE DATE"). The Company may deliver one Mandatory
         Conversion Notice hereunder and the Mandatory Conversion Notice shall
         be irrevocable.

                                      -15-
<PAGE>

                  (b)     Pro Rata Conversion Requirement. If the Company elects
         to cause a conversion of all or any portion of the outstanding
         Preferred Shares pursuant to Section 5(a), then it must simultaneously
         take the same action with respect to all Preferred Shares. If the
         Company elects to cause the conversion of Preferred Shares pursuant to
         Section 5(a) with respect to less than all of the outstanding Preferred
         Shares, then the Company shall require conversion of Preferred Shares
         from each of the holders of the Preferred Shares equal to the product
         of (I) the aggregate number of Preferred Shares which the Company has
         elected to cause to be converted pursuant to Section 5(a), multiplied
         by (II) the fraction, the numerator of which is the sum of the
         aggregate number of Preferred Shares purchased by such holder pursuant
         to the Securities Purchase Agreement and the denominator of which is
         the sum of the aggregate number of Preferred Shares purchased by all
         holders pursuant to the Securities Purchase Agreement (such fraction
         with respect to each holder is referred to as its "ALLOCATION
         PERCENTAGE," and such amount with respect to each holder is referred to
         as its "PRO RATA CONVERSION AMOUNT"). In the event that the initial
         holder of any Preferred Shares shall sell or otherwise transfer any of
         such holder's Preferred Shares, the transferee shall be allocated a pro
         rata portion of such holder's Allocation Percentage. The Mandatory
         Conversion Notice shall state (i) the Business Day selected for the
         Mandatory Conversion in accordance with Section 5(a), which Business
         Day shall be at least 20 Business Days but not more than 60 Business
         Days following the Mandatory Conversion Notice Date (the "MANDATORY
         CONVERSION DATE"), (ii) the aggregate number of Preferred Shares which
         the Company has elected to be subject to mandatory conversion from all
         of the holders of Preferred Shares pursuant to this Section 5, (iii)
         each holder's Pro Rata Conversion Amount and (iv) the number of shares
         of Common Stock to be issued to such holder as of the Mandatory
         Conversion Date. All Preferred Shares converted by a holder after the
         Mandatory Conversion Notice Date shall reduce the amount of Preferred
         Shares required to be converted on the Mandatory Conversion Date. If
         the Company has elected a Mandatory Conversion, the mechanics of
         conversion set forth in Section 2(c) shall apply, to the extent
         applicable, as if the Company and the Transfer Agent had received from
         the applicable holder on the Mandatory Conversion Date a Conversion
         Notice with respect to the Preferred Shares being converted pursuant to
         the Mandatory Conversion.

            (6)   Reservation of Shares. The Company shall, so long as any of
         the Preferred Shares are outstanding, take all action necessary to
         reserve and keep available out of its authorized and unissued Common
         Stock, solely for the purpose of effecting the conversions of the
         Preferred Shares, such number of shares of Common Stock as shall from
         time to time be sufficient to effect the conversion of all of the
         Preferred Shares, then outstanding; provided that the number of shares
         of Common Stock so reserved shall at no time be less than 130% of the
         number of shares of Common Stock for which the Preferred Shares are at
         any time convertible (without regard to any limitations on
         conversions). The initial number of shares of Common Stock reserved for
         conversions of the Preferred Shares and each increase in the number of
         shares so reserved shall be allocated pro rata among the holders of the
         Preferred Shares based on the number of Preferred Shares held by each
         holder at the time of issuance of the Preferred Shares or increase in
         the number of reserved shares, as the case may be. In the event a
         holder shall sell or otherwise transfer any of such holder's Preferred
         Shares, each transferee shall be allocated a pro rata portion of the
         number of reserved shares of Common Stock reserved for such transferor.
         Any shares of Common Stock reserved and allocated to any Person which
         ceases to hold any Preferred Shares shall be allocated to the remaining
         holders of Preferred Shares, pro rata based on the number of Preferred
         Shares then held by such holders.

                                      -16-
<PAGE>

            (7)   Voting Rights. On any matter presented to the stockholders of
         the Company for their action or consideration at any meeting of
         stockholders of the Company (or by written action of stockholders in
         lieu of meeting), each holder of outstanding Preferred Shares shall be
         entitled to the number of votes equal to the number of whole shares of
         Common Stock into which the Preferred Shares held by such holder are
         convertible (subject to the limitations of Section 4(a) above) as of
         the record date for determining stockholders entitled to vote on such
         matter. Except as provided by law, holders of Preferred Shares shall
         vote together with the holders of Common Stock, and with the holders of
         any other series of preferred stock the terms of which so provide, as a
         single class.

            (8)   Liquidation, Dissolution, Winding-Up. In the event of any
         voluntary or involuntary liquidation, dissolution or winding up of the
         Company, the holders of the Preferred Shares shall be entitled to
         receive in cash out of the assets of the Company, whether from capital
         or from earnings available for distribution to its stockholders (the
         "LIQUIDATION FUNDS"), before any amount shall be paid to the holders of
         any of the capital stock of the Company of any class junior in rank to
         the Preferred Shares in respect of the preferences as to distributions
         and payments on the liquidation, dissolution and winding up of the
         Company, an amount per Preferred Share equal to Two Dollars ($2.00);
         provided that, if the Liquidation Funds are insufficient to pay the
         full amount due to the holders of Preferred Shares and holders of
         shares of other classes or series of preferred stock of the Company
         that are of equal rank with the Preferred Shares as to payments of
         Liquidation Funds (the "PARI PASSU SHARES"), then each holder of
         Preferred Shares and Pari Passu Shares shall receive a percentage of
         the Liquidation Funds equal to the full amount of Liquidation Funds
         payable to such holder as a liquidation preference, in accordance with
         their respective Certificate of Designations, Preferences and Rights,
         as a percentage of the full amount of Liquidation Funds payable to all
         holders of Preferred Shares and Pari Passu Shares. The purchase or
         redemption by the Company of stock of any class, in any manner
         permitted by law, shall not, for the purposes hereof, be regarded as a
         liquidation, dissolution or winding up of the Company. Neither the
         consolidation or merger of the Company with or into any other Person,
         nor the sale or transfer by the Company of less than substantially all
         of its assets, shall, for the purposes hereof, be deemed to be a
         liquidation, dissolution or winding up of the Company.

            (9)   Preferred Rank. All shares of Common Stock shall be of junior
         rank to all Preferred Shares with respect to the preferences as to
         distributions and payments upon the liquidation, dissolution and
         winding up of the Company. The rights of the shares of Common Stock
         shall be subject to the preferences and relative rights of the
         Preferred Shares. Without the prior express written consent of the
         Required Holders, the Company shall not hereafter authorize or make any
         amendment to the Company's Certificate of Incorporation or bylaws, or
         file any resolution of the board of directors of the Company with the
         Secretary of State of the State of Nevada or enter into any agreement
         containing any provisions, which would adversely affect or otherwise

                                      -17-
<PAGE>

         impair the rights or relative priority of the holders of the Preferred
         Shares relative to the holders of the Common Stock or the holders of
         any other class of capital stock. In the event of the merger or
         consolidation of the Company with or into another corporation, the
         Preferred Shares shall maintain their relative powers, designations and
         preferences provided for herein and no merger shall result inconsistent
         therewith.

            (10)  Participation. The holders of the Preferred Shares shall, as
         holders of Preferred Stock, be entitled to such dividends paid and
         distributions made to the holders of Common Stock to the same extent as
         if such holders of Preferred Shares had converted the Preferred Shares
         into Common Stock (without regard to any limitations on conversion
         herein or elsewhere) and had held such shares of Common Stock on the
         record date for such dividends and distributions. Payments under the
         preceding sentence shall be made concurrently with the dividend or
         distribution to the holders of Common Stock.

            (11)  Vote to Change the Terms of or Issue Preferred Shares. The
         affirmative vote at a meeting duly called for such purpose or the
         written consent without a meeting, of the Required Holders, shall be
         required for (a) any change to this Certificate of Designations or the
         Company's Articles of Incorporation which would amend, alter, change or
         repeal any of the powers, designations, preferences and rights of the
         Preferred Shares and (b) the issuance of Preferred Shares other than
         pursuant to the Securities Purchase Agreement.

            (12)  Lost or Stolen Certificates. Upon receipt by the Company of
         evidence reasonably satisfactory to the Company of the loss, theft,
         destruction or mutilation of any Preferred Stock Certificates
         representing the Preferred Shares, and, in the case of loss, theft or
         destruction, of an indemnification undertaking by the holder to the
         Company in customary form (accompanied by the posting of a standard
         indemnity bond if so requested by the Company) and, in the case of
         mutilation, upon surrender and cancellation of the Preferred Stock
         Certificate(s), the Company shall execute and deliver new preferred
         stock certificate(s) of like tenor and date; provided, however, the
         Company shall not be obligated to re-issue preferred stock certificates
         if the holder contemporaneously requests the Company to convert such
         Preferred Shares into Common Stock.

            (13)  Remedies, Characterizations, Other Obligations, Breaches and
         Injunctive Relief. The remedies provided in this Certificate of
         Designations shall be cumulative and in addition to all other remedies
         available under this Certificate of Designations, at law or in equity
         (including a decree of specific performance and/or other injunctive
         relief). No remedy contained herein shall be deemed a waiver of
         compliance with the provisions giving rise to such remedy. Nothing
         herein shall limit a holder's right to pursue actual damages for any
         failure by the Company to comply with the terms of this Certificate of
         Designations. The Company covenants to each holder of Preferred Shares
         that there shall be no characterization concerning this instrument
         other than as expressly provided herein. Amounts set forth or provided
         for herein with respect to payments, conversion and the like (and the
         computation thereof) shall be the amounts to be received by the holder
         thereof and shall not, except as expressly provided herein, be subject
         to any other obligation of the Company (or the performance thereof).
         The Company acknowledges that a breach by it of its obligations

                                      -18-
<PAGE>

         hereunder will cause irreparable harm to the holders of the Preferred
         Shares and that the remedy at law for any such breach may be
         inadequate. The Company therefore agrees that, in the event of any such
         breach or threatened breach, the holders of the Preferred Shares shall
         be entitled, in addition to all other available remedies, to an
         injunction restraining any breach, without the necessity of showing
         economic loss and without any bond or other security being required.

            (14)  Construction. This Certificate of Designations shall be deemed
         to be jointly drafted by the Company and all holders and shall not be
         construed against any person as the drafter hereof.

            (15)  Failure or Indulgence Not Waiver. No failure or delay on the
         part of a holder of Preferred Shares in the exercise of any power,
         right or privilege hereunder shall operate as a waiver thereof, nor
         shall any single or partial exercise of any such power, right or
         privilege preclude other or further exercise thereof or of any other
         right, power or privilege.

            (16)  Notice. Whenever notice is required to be given under this
         Certificate of Designations, unless otherwise provided herein, such
         notice shall be given in accordance with Section 9(f) of the Securities
         Purchase Agreement.

            (17)  Transfer of Preferred Shares. A holder of Preferred Shares may
         assign some or all of the Preferred Shares and the accompanying rights
         hereunder held by such holder without the consent of the Company;
         provided that such assignment is in compliance with applicable
         securities laws.

            (18)  Preferred Share Register. The Company shall maintain at its
         principal executive offices (or such other office or agency of the
         Company as it may designate by notice to the holders of the Preferred
         Shares), a register for the Preferred Shares, in which the Company
         shall record the name and address of the persons in whose name the
         Preferred Shares have been issued, as well as the name and address of
         each transferee. The Company may treat the person in whose name any
         Preferred Share is registered on the register as the owner and holder
         thereof for all purposes, notwithstanding any notice to the contrary,
         but in all events recognizing any properly made transfers.

            (19)  Stockholder Matters. Any stockholder action, approval or
         consent required, desired or otherwise sought by the Company pursuant
         to the rules and regulations of the Principal Market, the NRS, this
         Certificate of Designations or otherwise with respect to the Common
         Stock issuable upon conversion of the Preferred Shares or the issuance
         of any Warrants and the Common Stock issuable upon exercise thereof may
         be effected by written consent of the Company's stockholders or at a
         duly called meeting of the Company's stockholders, all in accordance
         with the applicable rules and regulations of the Principal Market and
         the NRS.

                                     * * * *
<PAGE>

                                    EXHIBIT I

                         TECHALT, INC. CONVERSION NOTICE

         Reference is made to the Amended Certificate of Designations
preferences and rights of TechAlt, Inc., a Nevada corporation (the "COMPANY"),
for its Series A Convertible Preferred Stock (the "CERTIFICATE OF
DESIGNATIONS"). In accordance with and pursuant to the Certificate of
Designations, the undersigned hereby elects to convert the number of shares of
Series A Convertible Preferred Stock, par value $.001 per share (the "PREFERRED
SHARES"), of the Company indicated below into shares of Common Stock, par value
$.001 per share (the "COMMON STOCK"), of the Company, as of the date specified
below.

         Date of Conversion:
                            ----------------------------------------------------

         Number of Preferred Shares to be converted:

         Stock certificate no(s). of Preferred Shares to be converted:
                                                                      ----------

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

Please confirm the following information:

         Conversion Price:
                          ------------------------------------------------------

         Number of shares of Common Stock to be issued:

         Please issue the Common Stock into which the Preferred Shares are being
converted in the following name and to the following address:

         Issue to:
                  --------------------------------------------------------------

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

         Facsimile Number:
                          ------------------------------------------------------

         Authorization:
                       ---------------------------------------------------------

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

         Dated:
               ----------------------------------------

         Account Number (if electronic book entry transfer):
                                                            --------------------

         Transaction Code Number (if electronic book entry transfer):

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

    [NOTE TO HOLDER -- THIS FORM MUST BE SENT CONCURRENTLY TO TRANSFER AGENT]
<PAGE>

                                 ACKNOWLEDGMENT

                  The Company hereby acknowledges this Conversion Notice and
hereby directs Interwest Transfer Company, Inc. to issue the above indicated
number of shares of Common Stock in accordance with the Irrevocable Transfer
Agent Instructions dated January __ , 2004 from the Company and acknowledged and
agreed to by Interwest Transfer Company, Inc.

                                 TECHALT, INC.

                                 By:
                                    --------------------------------------------

                                 Name:
                                      ------------------------------------------
                                 Title:
                                       -----------------------------------------EXECUTION VERSION

                         WAIVER AND AMENDMENT AGREEMENT

         This WAIVER AND AMENDMENT AGREEMENT (this "WAIVER AND AMENDMENT ")
dated as of December ___, 2004, is entered into among TechAlt, Inc., a Nevada
corporation (f.k.a. Dendo Global Corp.) (the "COMPANY "), and the several
undersigned investors in the Company (each, individually, an "INVESTOR",
collectively, the "INVESTORS ").

         WHEREAS, pursuant to a Securities Purchase Agreement, dated as of
August 24, 2004 (the "SECURITIES PURCHASE AGREEMENT "), by and among the Company
and the Investors, the Company sold to the Investors (i) 500,000 shares of the
Company's Series A Convertible Preferred Stock, par value $0.001 per share (the
"SERIES A PREFERRED"), (ii) warrants to purchase 1,000,000 shares of the
Company's common stock, par value $0.001 per share ("COMMON STOCK"), (iii)
Additional Investment Rights to purchase 3,500,000 additional shares of Series A
Preferred, and (iv) additional warrants to purchase 7,000,000 shares of Common
Stock (together (i) through (iv), the "OFFERING "). Capitalized terms used
herein and not otherwise defined shall have the meaning ascribed to them in the
Securities Purchase Agreement; WHEREAS, in connection with the settlement (the
"SETTLEMENT ") of certain litigation instituted by Paul Masanek and Services By
Designwise, Ltd., an Illinois corporation (collectively, "MASANEK"), the Company
and Masanek intend to enter into a (i) Settlement Agreement, (ii) Sales
Agreement, (iii) Consulting Agreement, (iv) Right of First Refusal Agreement,
(v) Warrant, (vi) Secured Convertible Promissory Note, (vii) Registration Rights
Agreement, and (viii) Agreement and Plan of Merger among the Company, Technology
Alternatives, Inc., TechAlt Acquisitions, Inc., James E. Solomon and Paul
Masanek (the "MERGER"), of which true and complete copies have been delivered to
the Investors on or prior to the date hereof (collectively, the "MASANEK
SETTLEMENT DOCUMENTS"). Further, and also in connection with the Settlement, the
Company intends to enter into an Agreement to Rescind Intellectual Property
License Agreement with Technology Alternatives, Inc., of which a true and
complete copy has been delivered to the Investors on or prior to the date hereof
(the "RESCISSION AGREEMENT," and, together with the Masanek Settlement
Documents, the "SETTLEMENT DOCUMENTS ");

         WHEREAS, in connection with completing the settlement and the
Settlement Documents, the Company has requested, and subject to the terms and
conditions of this Waiver and Amendment, the Investors have agreed to waive
certain provisio ns of the Transaction Documents (as defined in the Securities
Purchase Agreement) described below; and

         WHEREAS, in order to facilitate the settlement and the consummation of
the transactions contemplated by the Settlement Documents, the parties hereto
further agree to amend certain provisions of the Transaction Documents as
described below.

         NOW, THEREFORE, the parties hereto agree as follows:
<PAGE>

1.       Definitions; References; Interpretation. Unless specifically defined

herein, each term used herein (including in the Recitals hereof) which is
defined in the Transaction Documents shall have the meaning assigned to such
term in the Transaction Documents.

2.       Waivers. The Investors hereby waive compliance by the Company with the
following sections of the following agreements only as those provisions relate
to the Settlement Documents and the consummation of the transactions
contemplated thereby:

         (a) Securities Purchase Agreement. (i) The provisions of Section 4(l)
of the Securities Purchase Agreement pertaining to Fundamental Transactions are
hereby waived only to the extent such provisions would apply to the Merger,
pursuant to which more than 50% of the shares of the Company will be acquired by
James E. Solomon (4,867,440), Paul Masanek (4,676,560) and Hudson Investment
Advisors, LLC (500,000) (collectively, the "MERGER SHARES")(1), in accordance
with the Masanek Settlement Documents; (ii) the provisions of Section 4(o) of
the Securities Purchase Agreement pertaining to the Additional Issuances of
Securities are hereby waived only to the extent such provisions would apply to
the issuance (A) by the Company to Masanek, in accordance with the terms of the
Masanek Settlement Documents, of (i) a Warrant to purchase 750,000 shares of
common stock at an exercise price of $1.00 per share, (ii) the Merger Shares,
(iii) a Secured Convertible Promissory Note in the principal amount of
$1,150,000, convertible into shares of common stock at the conversion price of
$1.00 per share, and (B) of Series A Preferred Stock and Warrants contemplated
to be offered to certain individual investors (the "OUTSIDE INVESTORS ") not
originally a party to the Transaction Documents (the "OUTSIDE INVESTOR
SECURITIES"), on the same terms and conditions as the Series A Preferred Stock
and Warrants offered pursuant to the Transaction Documents, which aggregate of
amount of investment by the Outside Investors shall not exceed $820,000 (i.e.,
820,000 shares of Series A Preferred Stock and Warrants to purchase 1,640,000
shares of common stock with an exercise price of $1.00 per share) (the
securities described in (ii)(A) and the Outside Investor Securities,
collectively the "WAIVED SECURITIES"), and (iii) the provisions of Section 5(b)
of the Securities Purchase Agreement requiring that the Company give no
instructions to the Transfer Agent other than the Irrevocable Transfer Agent
Instructions (as defined therein) are hereby waived only to the extent such
provisions would apply to the irrevocable transfer agent instructions to be
given by the Company to its transfer agent regarding the issuance of the Outside
Investor Securities.

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

(1) Pursuant to the terms of the Rescission Agreement, the 10,044,000 shares of
the Company's common stock issued pursuant to the Intellectual Property License
Agreement between the Company and Technology Alternatives, Inc. (the " LICENSE
AGREEMENT") will be cancelled. 10,044,000 shares will then be issued pursuant to
the Agreement and Plan of Merger among the Company, Technology Alternatives,
Inc., TechAlt Acquisitions, Inc., James E. Solomon and Paul Masanek (" MERGER
AGREEMENT"). Accordingly, there will be no dilution to the Investors on account
of the Merger Shares and post-Merger the Company will have 12,000,000 shares of
common stock issued and outstanding, the same amount of shares issued and
outstanding immediately following the License Agreement and immediately prior to
the execution of the Transaction Documents.
<PAGE>

         (b)      Registration Rights Agreement. The provisions of Section 2(b)
of the Registration Rights Agreement pertaining to the inclusion of securities
other than Registrable Securities on any Registration Statement are hereby
waived to only permit registration of (i) 130% of the 6,576,560 shares of the
common stock of the Company being issued to Masanek, (ii) 130% of the 3,280,000
shares of Common Stock which may be issued to the Outside Investors and (iii)
2,880,000 shares of Common Stock which may be issued to Sunrise Securities Corp.
and/or Sunrise Financial Group, Inc.

         (c)      The Warrants and Additional Warrants. (i) Sections 2(a) of the
Warrants and Additional Warrants pertaining to Adjustments upon issuance of
Common Stock are hereby waived only so far as those provisions relate to the
issuance of the Waived Securities, and (ii) Section 4(b) of the Warrants and
Additional Warrants pertaining to Fundamental Transactions are hereby waived
only so far as those provisions relate to the Merger.

         (d)      Additional Investment Rights. Section 2(b) of the Additional
Investment Right is hereby waived only insofar as those provisions relate to the
Merger.

         (e)      Lock-Up Agreement. The restrictions in clauses (1) and (2) of
the second paragraph of the Lock-Up Agreement dated August 18, 2004 (the
"LOCK-UP AGREEMENT "), among James E. Solomon and the Investors are hereby
waived only insofar as these restrictions would prohibit the cancellation in
connectio n with the Rescission Agreement of shares of common stock owned by
James E. Solomon.

         (f)      Certificate of Designations, Preferences and Rights of the
Series A Convertible Preferred Stock, as filed with the State of Delaware on
August 23, 2004, 2004 (the "CERTIFICATE "). (i) Section 2(e)(i) of the
Certificate is hereby waived only insofar as that provision relates to the
issuances of the Waived Securities; and (ii) Section 2(e)(iv)(C) of the
Certificate is hereby waived only to the extent such section would require
Notice of a Fundamental Transaction in connection with the Merger.

3.       Waivers Regarding Adjustments Unrelated to the Settlement Documents.
The Investors hereby waive compliance by the Company with the following section
of the following agreements only as that provision relates to the shares of
common stock, warrants and options to be issued to Sunrise Securities Corp. or
Sunrise Financial Group, Inc. (collectively, "SUNRISE") pursuant to the
Financial Advisory and Investment Banking Agreement and Public Relations
Retainer Agreement with the Company.

         (a)      Securities Purchase Agreement. The provisions of Section 4(o)
of the Securities Purchase Agreement pertaining to the Additional Issuances of
Securities are hereby waived only to the extent such provisions would apply to
the issuance to Sunrise of (i) 840,000 shares of common stock and warrants to
purchase 800,000 shares of common stock (exercise price of $.50 per share)
pursuant to the Financial Advisory and Investment Banking Agreement, and (ii)
240,000 shares of common stock and options to purchase 1,000,000 shares of
common stock (exercise price of (a) $.50 per share on options to purchase
500,000 shares of common stock and (b) $1.00 per share on options to purchase
500,000 shares of common stock) pursuant to the Public Relations Retainer
Agreement (collectively, the "SUNRISE SECURITIES").

<PAGE>

         (b)      The Warrants and Additional Warrants. Sections 2(a) of the
Warrants and Additional Warrants pertaining to Adjustments upon issuance of
Common Stock are hereby waived only so far as those provisions relate to the
issuances of the Sunrise Securities. (c) The Certificate. Section 2(e)(i) of the
Certificate is hereby waived only insofar as that provision relates to the
issuances of the Sunrise Securities.

4.       Amendments.

         (a)      Securities Purchase Agreement.

                  (i)     Section 4(g) of the Securities Purchase Agreement is
hereby amended by deleting from the last sentence thereof the amount of $10,000
and substituting in lieu thereof the amount of $47,750.

                  (ii)    Section 7(b) of the Securities Purchase Agreement is
hereby amended by replacing the opinion of the Otto Law Group, PLLC (the "OTTO
LAW GROUP") referenced as Exhibit G thereto, with the opinion of the Otto Law
Group in the form attached hereto as Exhibit A.

                  (iii)   Section 7(j) is hereby amended by deleting such
paragraph in its entirety, and substituting in lieu thereof, the following:

                  "The Company shall have consummated the Agreement and Plan of
                  Merger and Reorganization among the Company, Technology
                  Alternatives, Inc., James E. Solomon and Paul Masanek in
                  accordance with the terms and conditions of the Agreement and
                  Plan of Merger and Reorganization attached hereto as Exhibit
                  B. "

5.       Representations and Warranties. The Company hereby represents and
warrants to the Investors as follows:

         (a)      This Waiver and Amendment constitutes the legal, valid and
binding obligations of the Company, enforceable against it in accordance with
its terms.

         (b)      The Company is entering into this Waiver and Amendment on the
basis of its own investigation and for its own reasons, without reliance upon
the Investors or any other person.

         (c)      The Company's obligations under the Transaction Documents are
not subject to any defense, counterclaim, set-off, right of recoupment,
abatement or other claim.
<PAGE>

6.       Miscellaneous.

         (a)      The Company acknowledges and agrees that the execution and
delivery by the Investors of this Waiver and Amendment shall not be deemed (i) a
waiver of any provision of any Transaction Document by any Investor except as
explicitly set forth herein, or (ii) to create a course of dealing or an
obligation to execute similar waivers or amendments under the same or similar
circumstances in the future.

         (b)      This Waiver and Amendment shall be binding upon and inure to
the benefit of the parties (i) hereto, and (ii) to the Transaction Documents,
and their respective successors and assigns.

         (c)      This Waiver and Amendment shall be governed by and construed
in accordance with the law of the State of New York, provided that the Investors
shall retain all rights arising under Federal law.

         (d)      This Waiver and Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt of a facsimile transmitted document purportedly bearing the
signature of a Investor or the Company shall bind such Investor or the Company,
respectively, with the same force and effect as the delivery of a hard copy
original.

         (e)      The amendments described herein shall become effective, and
shall be deemed to be effective as of the date hereof. Except as otherwise
expressly modified herein, the Transaction Documents sha ll remain unchanged and
is in full force and effect.

         (f)      If any term or provision of this Waiver and Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Waiver and
Amendment.

      [Remainder of Page Intentionally Left Blank; Signature Page Follows]

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be duly executed and delivered in New York, NY by their proper and
duly authorized officers as of the day and year first above written.

THE COMPANY:

TECHALT, INC.

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

THE INVESTORS:

Smithfield Fiduciary, LLC

By:
   ------------------------------------
Name: Adam J. Chill
Title: Authorized Signatory

---------------------------------------
Derek Caldwell

Cherokee Holdings II, LLC

By:
   ------------------------------------
Name: Samir N. Masri
Title: Secretary and Treasurer

Cranshire Capital, LP

By: DOWNSVIEW CAPITAL, The General Partner

By:
   ------------------------------------
   Name: Mitchell Kopin
   Title: President
<PAGE>

Crestview Capital Master, LLC

By:
   ------------------------------------
Name: Stewart Flink
Title:

DKR SoundShore Oasis Holding Fund, Ltd.

By:
   ------------------------------------
Name: Ethan Benovitz
Title:

Iroquois Capital, LP

By:
   ------------------------------------
Name: Michael Chill
Title:

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