Document:

SECURITY AGREEMENT

         THIS SECURITY AGREEMENT (this "Agreement") dated as of April ___, 2005,
is among RCG Companies  Incorporated,  a Delaware corporation (together with its
successors and assigns, "Debtor"), and [Amadeus Americas, Inc. f/k/a Amadeus NMC
Holding,  Inc.,  a Delaware  corporation]  [Terra  Networks  Asociadas,  S.L., a
company  organized and existing  under the laws of the Kingdom of Spain] [Avanti
Management, Inc., a Pennsylvania corporation] [Libra Securities, LLC, a Delaware
limited liability company] ("Secured Party").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS,  this  Agreement is made pursuant to the Agreement and Plan of
Merger,  dated  February  10,  2005,  by and  among  OneTravel,  Inc.,  a  Texas
corporation, the Debtor, Amadeus Americas, Inc. f/k/a Amadeus NMC Holding, Inc.,
a Delaware corporation  ("Amadeus"),  Terra Networks Asociadas,  S.L., a company
organized and existing under the laws of the Kingdom of Spain ("Terra"),  Avanti
Management,  Inc., a  Pennsylvania  corporation  ("Avanti"),  and OT Acquisition
Corporation, a Texas corporation (the "Merger Agreement");

         WHEREAS, Debtor has entered into a Convertible Promissory Note dated as
of the date hereof with the Secured Party (the "Promissory Note"); and

         WHEREAS,  all of Debtor's  obligations,  liabilities  and  indebtedness
under the Promissory Note are to be secured pursuant to this Agreement;

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which  hereby are  acknowledged,  the  parties  hereto  agree as
follows:

         1. Definitions.  The following terms have the following  meanings (such
definitions  to be  applicable  to both the  singular  and plural  forms of such
terms):

         Arrangement   means  (i)  any  written  lease,   agreement,   contract,
commitment or license or (ii) any enforceable  understanding or enforceable oral
lease,  agreement,  contract,  commitment or license; by which Debtor (a) has or
may acquire  any  rights,  (b) has or may become  subject to any  obligation  or
liability, or (c) any of the assets owned or used by it is or may become bound.

         Collateral means all of the assets of the Debtor, wherever located, now
owned or in the future  existing  or acquired by Debtor,  and all  proceeds  and
products thereof, and any substitutes or replacements  therefore,  including but
not limited to the following items and types of property of the Debtor:

                  (a) All personal  property and fixture  property of every kind
         and nature including,  without limitation,  all accounts, chattel paper
         (whether   tangible  or  electronic),   goods   (including   inventory,
         equipment,   and  any  accessions  thereto),   software,   instruments,
         investment property,  documents,  deposit accounts,  money,  commercial
         tort claims, letters of credit or letter-of-credit  rights,  supporting
         obligations,  tax refunds,  and general intangibles  (including payment
         intangibles);

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                  (b) All rights,  titles, and interests of Debtor in and to all
         outstanding  stock,  equity,  or other  investment  securities owned by
         Debtor,  including,  without  limitation,  all  capital  stock  of  any
         subsidiary of the Debtor;

                  (c) All rights,  titles, and interests of Debtor in and to all
         promissory notes and other  instruments  payable to Debtor,  including,
         without   limitation,   all   inter-company   notes  from  subsidiaries
         ("Collateral Notes") and all rights, titles,  interests,  and liens and
         encumbrances  Debtor  may have,  be, or  become  entitled  to under all
         present  and  future  loan  agreements,   security  agreements,  pledge
         agreements,  deeds of trust, mortgages,  guarantees, or other documents
         assuring or securing payment of or otherwise  evidencing the Collateral
         Notes;

                  (d) The  Partnership  Interests  (as  defined  below)  and all
         rights of Debtor with respect thereto,  including,  without limitation,
         all  of  Debtor's  distribution  rights,  income  rights,   liquidation
         interest,  accounts,  contract  rights,  general  intangibles,   notes,
         instruments,   drafts,   and  documents  relating  to  the  Partnership
         Interests;

                  (e) (i) All  copyrights  (whether  statutory  or  common  law,
         registered or unregistered),  works protectable by copyright, copyright
         registrations,   copyright  licenses,  and  copyright  applications  of
         Debtor,  including,  without limitation,  all of Debtor's right, title,
         and interest in and to all  copyrights  registered in the United States
         Copyright  Office or  anywhere  else in the world;  (ii) all  renewals,
         extensions,  and  modifications  thereof;  (iii) all income,  licenses,
         royalties,  damages, profits, and payments relating to or payable under
         any of the  foregoing;  (iv) the  right to sue for  past,  present,  or
         future infringements of any of the foregoing;  and (v) all other rights
         and benefits relating to any of the foregoing  throughout the world; in
         each  case,   whether  now  owned  or  hereafter   acquired  by  Debtor
         ("Copyrights");

                  (f) (i) All patents, patent applications, patent licenses, and
         patentable  inventions  of  Debtor,   including,   without  limitation,
         registrations,  recordings,  and  applications  thereof  in the  United
         States Patent and Trademark  Office or in any similar  office or agency
         of the United  States,  any state  thereof or any other  country or any
         political   subdivision   thereof,   and  all  of  the  inventions  and
         improvements  described and claimed  therein;  (ii) all  continuations,
         divisions,   renewals,   extensions,   modifications,    substitutions,
         reexaminations,  continuations-in-part,  or  reissues  of  any  of  the
         foregoing;  (iii) all income, royalties,  profits, damages, awards, and
         payments  relating to or payable under any of the  foregoing;  (iv) the
         right to sue for past, present,  and future infringements of any of the
         foregoing; and (v) all other rights and benefits relating to any of the
         foregoing  throughout  the world;  in each case,  whether  now owned or
         hereafter acquired by Debtor ("Patents");

                  (g) (i)  All  trademarks,  trademark  licenses,  trade  names,
         corporate names,  company names,  business names,  fictitious  business
         names, trade styles,  service marks,  certification  marks,  collective
         marks,   logos,   other  business   identifiers,   all   registrations,
         recordings,  and applications thereof,  including,  without limitation,
         registrations, recordings, and applications in the United States Patent
         and Trademark  Office or in any similar  office or agency of the United
         States,  any  state  thereof  or any  other  country  or any  political
         subdivision  thereof;  (ii)  all  reissues,  extensions,  and  renewals
         thereof;  (iii) all income,  royalties,  damages,  and  payments now or
         hereafter relating to or payable under any of the foregoing, including,
         without   limitation,   damages   or   payments   for  past  or  future
         infringements of any of the foregoing;  (iv) the right to sue for past,
         present,  and future  infringements  of any of the  foregoing;  (v) all
         rights  corresponding to any of the foregoing throughout the world; and
         (vi)  all  goodwill  associated  with  and  symbolized  by  any  of the
         foregoing,  in each case,  whether now owned or  hereafter  acquired by
         Debtor ("Trademarks");

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                  (h) All of Debtor's computer software,  programs and databases
         (including,  without  limitation,  source  code,  object  code  and all
         related  applications and data files),  firmware and  documentation and
         materials  relating  thereto,  together  with  any and all  maintenance
         rights,  service  rights,  programming  rights,  hosting  rights,  test
         rights,  improvement rights,  renewal rights and indemnification rights
         and any substitutions,  replacements,  improvements, error corrections,
         updates and new versions of any of the foregoing;

                  (i) All of Debtor's  rights,  titles,  and  interests in other
         proprietary  rights  not  included  in  the  Copyrights,   Patents  and
         Trademarks,   whether  now  owned  or  hereafter  acquired  by  Debtor,
         including without limitation:  (i) any knowledge or information that is
         material to Debtor's  business and that  enables  Debtor to operate its
         business  with the  accuracy,  efficiency,  or precision  necessary for
         commercial success, or otherwise affords Debtor a commercial  advantage
         for the  possession  or  knowledge  thereof;  (ii)  any new and  useful
         process, machine, manufacture, or composition of matter, or any new and
         useful  improvement  thereof  that  is  material  to the  operation  of
         Debtor's  business and developed by Debtor,  its employees,  or agents,
         which could  potentially be eligible for  protection as Patent(s),  but
         whether  or not  currently  the  subject  of  Patent(s);  and (iii) all
         information or other items recognized as "trade secrets" under state or
         federal  law  and  all   comparable   rights   recognized   in  foreign
         jurisdictions or conventions or by treaty;

                  (j) (i) All of debtor's rights,  titles, and interests in, to,
         and under the Arrangements,  including,  without limitation, all rights
         of Debtor to receive  moneys due and to become due under or pursuant to
         the Arrangements,  (ii) all rights of Debtor to receive proceeds of any
         insurance,  indemnity,  warranty,  or  guaranty  with  respect  to  the
         Arrangements,  (iii) all claims of Debtor for damages arising out of or
         for breach of or default under the Arrangements, and (iv) all rights of
         Debtor to compel  performance  and  otherwise  exercise  all rights and
         remedies under the Arrangements;

                  (k)  All  present  and  future  automobiles,   trucks,   truck
         tractors, trailers,  semi-trailers,  or other motor vehicles or rolling
         stock, now owned or hereafter acquired by such Debtor;

                  (l) Any and all  material  deposit  accounts,  bank  accounts,
         investment  accounts,  or securities  accounts,  now owned or hereafter
         acquired or opened by Debtor and any account which is a replacement  or
         substitute  for  any  of  such  accounts,  together  with  all  monies,
         instruments,  certificates, checks, drafts, wire transfer receipts, and
         other property deposited therein and all balances therein;

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                  (m) All present and future distributions,  income,  increases,
         profits,  combinations,  reclassifications,  improvements, and products
         of, accessions,  attachments, and other additions to, tools, parts, and
         equipment used in connection  with, and  substitutes  and  replacements
         for, all or part of the Collateral described above;

                  (n) All present and future accounts,  contract rights, general
         intangibles,  chattel paper, documents,  instruments,  cash and noncash
         proceeds,  and other  rights  arising from or by virtue of, or from the
         voluntary or involuntary  sale or other  disposition of, or collections
         with  respect to, or  insurance  proceeds  payable  with respect to, or
         proceeds  payable by virtue of  warranty  or other  claims  against the
         manufacturer  of, or claims  against any other  Person with respect to,
         all or any part of the Collateral  heretofore  described in this clause
         or otherwise; and

                  (o) All  present  and future  security  for the payment to any
         company of any of the Collateral  described  above and goods which gave
         or will give rise to any such Collateral or are evidenced,  identified,
         or represented therein or thereby.

         Event of  Default  means  the  occurrence  of any Event of  Default  as
defined in the Promissory Note.

         Jurisdiction of  Organization  means the  jurisdiction  under whose law
Debtor is organized on the date hereof.

         Obligations  means the  obligations  of the Debtor under the Promissory
Note.

         Partnerships shall mean (a) any partnership,  joint venture, or limited
liability  company  in which  Debtor  shall,  at any time,  become a limited  or
general partner, venturer, or member, or (b) any partnership,  joint venture, or
corporation formed as a result of the restructure,  reorganization, or amendment
of the Partnerships.

         Partnership Agreements shall mean partnership agreements, joint venture
agreements,  or organizational  agreements for any of the Partnerships (together
with any modifications,  amendments or restatements  thereof),  and "Partnership
Agreement" means any one of the Partnership Agreements.

         Partnership  Interests  shall  mean all of  Debtor's  right,  title and
interest now or hereafter accruing under the Partnership Agreements with respect
to all distributions,  allocations,  proceeds,  fees, preferences,  payments, or
other benefits,  which Debtor now is or may hereafter become entitled to receive
with  respect to such  interests  in the  Partnerships  and with  respect to the
repayment of all loans now or hereafter made by Debtor to the Partnerships.

         Permitted  Liens means (a) liens for taxes,  assessments,  governmental
charges or levies or mechanics' and other statutory liens which are not material
in amount relative to the property  affected and which are not yet delinquent or
can be paid without  penalty or are being contested in good faith by appropriate
proceedings  in  respect  thereof;  (b)  imperfections  of title  which  are not
substantial  in  amount  relative  to the  property  affected  and  which do not
materially  interfere  with the present use of the property  subject  thereto or
affected thereby;  and (c) liens arising from travel agency regulations relating
to customer funds.

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<PAGE>

         Records means  information  which is inscribed on a tangible  medium or
which  is  stored  in an  electronic  or  other  medium  and is  retrievable  in
perceivable form.

         UCC means the Uniform  Commercial Code as in effect in the Jurisdiction
of Organization  from time to time;  provided that, as used in Section 9 hereof,
"UCC" shall mean the Uniform  Commercial  Code as in effect from time to time in
any applicable jurisdiction.

         2. Grant of Security Interest.  As security for the prompt and complete
payment,  performance  and observance when due (whether at stated  maturity,  by
acceleration or otherwise) of all of the  Obligations,  Debtor hereby assigns to
Secured Party and grants to Secured Party a continuing  security interest in and
to (and a setoff right against) the Collateral.

         3. Warranties. Debtor warrants that: (i) no financing statements, other
than any which may have been filed on behalf of Secured Party or as disclosed on
Schedule 3 attached  hereto,  covering any of the  Collateral  is on file in any
public  office;  (ii) Debtor is the lawful owner of all  Collateral  free of all
liens and claims other than the security interests hereunder, liens with respect
to the  financing  statements  disclosed  on  Schedule  3 attached  hereto,  and
Permitted  Liens,  with full power and  authority to execute this  Agreement and
perform  Debtor's  obligations  hereunder,  and to subject the Collateral to the
security interest hereunder;  (iii) this Agreement is a legal, valid and binding
obligation of Debtor,  enforceable in accordance with its terms, except that the
enforceability  of this  Agreement  may be  limited by  bankruptcy,  insolvency,
fraudulent conveyance, fraudulent transfer, reorganization,  moratorium or other
similar laws now or hereafter in effect relating to creditors'  rights generally
and by general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law); (iv) Debtor's Jurisdiction of Organization
is Delaware,  Debtor's chief executive office and principal place of business is
located in Charlotte,  North Carolina,  Debtor's tax  identification  number and
organizational  identification  number are  correctly set forth on the financing
statement listing Secured Party as "Secured Party," and Debtor maintains a place
of business in the following locations: Atlanta, Georgia and ________.

         4.   Collections,   etc.  Until  such  time  during  the  occurrence  a
continuance of an Event of Default as the Secured Parties shall notify Debtor of
the revocation of such power and authority, Debtor (a) will, at its own expense,
endeavor  to  collect,  as and  when  due,  all  amounts  due  under  any of the
Collateral  as Debtor may deem  advisable,  and (b) may grant,  in the  ordinary
course of business, to any party obligated on any Collateral, any rebate, refund
or allowance to which such party may be lawfully  entitled,  and may accept,  in
connection therewith, the return of Goods, the sale or lease of which shall have
given rise to such Collateral. The Secured Party, however, may, at any time that
an Event of Default exists, whether before or after any revocation of such power
and  authority  or the  maturity of any of the  Obligations,  notify any parties
obligated on any of the  Collateral  to make payment to the Secured Party of any
amounts due or to become due  thereunder  and enforce  collection  of any of the
Collateral  by suit or otherwise and  surrender,  release or exchange all or any
part thereof,  or  compromise or extend or renew for any period  (whether or not
longer  than the  original  period) any  indebtedness  thereunder  or  evidenced
thereby.  Upon the  request  of the  Secured  Party  during the  occurrence  and
continuance of an Event of Default,  Debtor will, at its own expense, notify any
or all parties obligated on any of the Collateral to make payment to the Secured
Party of any amounts due or to become due thereunder.

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<PAGE>

         Upon request by the Secured Party during the occurrence and continuance
of an Event of Default,  Debtor  will  forthwith,  upon  receipt,  transmit  and
deliver to the Secured Party, in the form received, all cash, checks, drafts and
other instruments or writings for the payment of money (properly endorsed, where
required, so that such items may be collected by the Secured Party) which may be
received  by Debtor  at any time in full or  partial  payment  or  otherwise  as
proceeds of any of the  Collateral.  Except as the Secured  Party may  otherwise
consent in writing,  any such items  which may be so  received  by Debtor  after
receipt of the Secured Party's request pursuant to the preceding sentence,  will
not be  commingled  with any  other of its funds or  property,  but will be held
separate and apart from its own funds or property and upon express trust for the
Secured Party until  delivery is made to the Secured  Party.  Debtor will comply
with the terms and conditions of any consent given by the Secured Party pursuant
to the foregoing sentence.

         The Secured Party (or any designee of the Secured  Party) is authorized
to  endorse,  in the name of the  Debtor,  any item,  howsoever  received by the
Secured  Party,  representing  any  payment on or other  proceeds  of any of the
Collateral;  provided  Secured  Party shall only be  entitled  to exercise  such
authorization  upon the  occurrence  and during the  continuance  of an Event of
Default.

         5. Certificates,  Schedules and Reports. Debtor will from time to time,
as the Secured Party may reasonably  request,  deliver to the Secured Party such
schedules,  certificates and reports  respecting all or any of the Collateral at
the  time  subject  to the  security  interest  hereunder.  Any  such  schedule,
certificate or report shall be executed by a duly  authorized  officer of Debtor
and shall be in such form and detail as the Secured  Party may  specify.  Debtor
shall  immediately  notify  the  Secured  Party of the  occurrence  of any event
causing  any  loss or  depreciation  in the  value  of any  Collateral  which is
material to Debtor taken as a whole, and such notice shall specify the amount of
such loss or depreciation.

         6.  Agreements  of  Debtor.  Debtor  (a) will  deliver  such  financing
statements (and hereby authorizes Secured Party to file any financing  statement
as Secured  Party  deems  necessary  to perfect  its  security  interest  in the
Collateral) and, upon request of the Secured Party, other documents (and pay the
cost of filing or recording  the same in all public  offices  reasonably  deemed
appropriate  by the Secured  Party) and do such other acts and things all as the
Secured  Party may from time to time request to  establish  and maintain a valid
security  interest in the  Collateral to secure the payment of the  Obligations;
(b) will keep its Records  concerning  the  Collateral  in such a manner as will
enable the Secured Party or its designees to determine at any time the status of
the  Collateral;  (c)  will  furnish  to  the  Secured  Party  such  information
concerning  Debtor and the Collateral as the Secured Party may from time to time
reasonably request; (d) will permit the Secured Party and their designees,  from
time to time, on reasonable  notice and at reasonable times and intervals during
normal business hours to inspect Debtor's  Collateral,  and to inspect and audit
all Records  and other  papers in the  possession  of Debtor  pertaining  to the
Collateral,  and will, upon request of the Secured Party during the existence of
a Default, deliver to the Secured Party all of such Records and papers; (e) will
promptly pay when due all  material  license  fees,  registration  fees,  taxes,
assessments  and other charges which may be levied upon or assessed  against the
ownership, operation, possession, maintenance or use of its Collateral; (f) will
take all steps reasonably necessary to protect, preserve and maintain all of its
rights in the  Collateral;  (g) will keep all of the tangible  Collateral in the
United States of America; (h) will reimburse the Secured Party for all expenses,
including reasonable attorney's fees and charges,  incurred by the Secured Party
in seeking to collect or enforce any rights in respect of  Debtor's  Collateral;
and (i) will not change its  Jurisdiction of Organization  from that which is in
effect on the date hereof without ten (10) days' prior written notice to Secured
Party.

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         7. Events of Default.  Whenever an Event of Default exists, the Secured
Party may exercise  from time to time any right or remedy  available to it under
applicable law (provided  nothing herein shall limit Secured  Party's ability to
exercise any right it may otherwise  have under the  Promissory  Note due to the
existence  of an  Event  of  Default).  Debtor  agrees,  in case of an  Event of
Default, to assemble,  at its expense,  all its Collateral at a convenient place
or  places  acceptable  to the  Secured  Party.  Any  notification  of  intended
disposition of any of the Collateral  required by law shall be deemed reasonably
and properly given if given at least ten (10) days before such disposition.  Any
proceeds of any disposition by the Secured Party of any of the Collateral may be
applied by the  Secured  Party to payment of  expenses  in  connection  with the
Collateral, including reasonable attorney's fees and charges, and any balance of
such  proceeds may be applied by the Secured Party toward the payment of such of
the Obligations, and in such order of application, as the Secured Party may from
time to time elect.

         Notwithstanding the foregoing, the rights and remedies of Secured Party
upon an Event of Default are governed by that certain  Intercreditor  Agreement,
dated of even date  herewith,  executed by  Amadeus,  Terra,  Avanti,  and Libra
Securities, LLC, a Delaware limited liability company.

         8. Additional Agreements of Debtor; Authorization of Secured Party.

         (a)  Debtor   hereby   irrevocably   appoints   Secured  Party  as  its
attorney-in-fact and proxy, with full authority in the place and stead of Debtor
and in the  name of  Debtor  or  otherwise,  from  time to time in such  Secured
Party's discretion,  to take any action and to execute any instrument which such
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement,  including, without limitation, (i) to ask, demand, collect, sue for,
recover,  compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any Collateral,  (ii) to receive,  endorse,
and  collect any drafts or other  instruments,  documents  and chattel  paper in
connection with clause (i) above, (iii) to file any claims or take any action or
institute  any  proceedings  which  such  Secured  Party may deem  necessary  or
desirable  for the  collection  of any  Collateral  or  otherwise to enforce the
rights of such Secured Party with respect to any Collateral, and (iv) to execute
assignments,  licenses and other documents to enforce the rights of such Secured
Party with respect to any  Collateral;  provided  that such Secured Party agrees
not to act as  attorney-in-fact  and  proxy  of the  Debtor  unless  an Event of
Default is then in  existence.  This power is coupled  with an  interest  and is
irrevocable until all of the Obligations are indefeasibly paid in full.

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         (b) If Debtor  fails to perform any  agreement  contained  herein,  the
Secured  Party  may  perform,   or  cause  performance  of,  such  agreement  or
obligation,  in the name of Debtor or the Secured Party, and the expenses of the
Secured Party incurred in connection  therewith  shall be payable to the Secured
Party on demand and shall be secured by the Collateral.

         (c) The powers  conferred on the Secured Party  hereunder are solely to
protect its interest in the  Collateral and shall not impose any duty upon it to
exercise any such powers.  Except for the safe custody of any  Collateral in its
possession and the accounting for moneys actually received by it hereunder,  the
Secured Party shall have no duty as to any Collateral or as to the taking of any
necessary  steps to preserve  rights  against  prior parties or any other rights
pertaining to any Collateral.

         (d) Anything  herein to the contrary  notwithstanding  (i) Debtor shall
remain liable under all licenses, contracts and otherwise with respect to any of
the Collateral to the extent set forth therein to perform all of its obligations
thereunder to the same extent as if this Agreement had not been  executed,  (ii)
the  exercise by the Secured  Party of any of their rights  hereunder  shall not
release  Debtor from any of its  obligations  under any  licenses,  contracts or
otherwise in respect of the  Collateral,  and (iii) the Secured  Party shall not
have any obligation or liability by reason of this Agreement under any licenses,
contracts or with respect to any of the other Collateral,  nor shall the Secured
Party be  obligated  to  perform  any of the  obligations  or  duties  of Debtor
thereunder  or to take any action to collect  or enforce  any claim for  payment
assigned hereunder.

         9.  Miscellaneous.  The Secured Party shall be deemed to have exercised
reasonable care in the custody and  preservation of any of the Collateral in its
possession  if it takes such  action  for that  purpose  as Debtor  requests  in
writing,  but failure of the Secured Party to comply with any such request shall
not of itself be deemed a failure to exercise reasonable care, and no failure of
the  Secured  Party to  preserve  or  protect  any right  with  respect  to such
Collateral  against  prior  parties,  or to do  any  act  with  respect  to  the
preservation of such  Collateral not so requested by Debtor,  shall be deemed of
itself a failure to exercise  reasonable  care in the custody or preservation of
such Collateral.

         Any  notice  provided  pursuant  to this  Agreement  shall  be given in
accordance with the notice provisions of the Merger Agreement.

         Debtor agrees to pay all expenses, including reasonable attorney's fees
and charges paid or incurred by the Secured Party in  endeavoring to collect the
Obligations,  or any part  thereof,  and in  enforcing  this  Agreement  against
Debtor, and such obligations will themselves be Obligations.

         No delay on the part of the Secured  Party in the exercise of any right
or remedy shall operate as a waiver thereof,  and no single or partial  exercise
by the  Secured  Party of any right or remedy  shall  preclude  other or further
exercise thereof or the exercise of any other right or remedy.

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         This  Agreement  shall  remain  in full  force  and  effect  until  the
Obligations  are paid in full in cash or converted in full pursuant to the terms
of  the  Promissory  Note.  If at  any  time  all or  any  part  of any  payment
theretofore applied by the Secured Party to any of the Obligations is or must be
rescinded or returned by the Secured Party for any reason whatsoever  (including
the insolvency, bankruptcy or reorganization of Debtor), such Obligations shall,
for the purposes of this  Agreement,  to the extent that such payment is or must
be  rescinded  or  returned,   be  deemed  to  have   continued  in   existence,
notwithstanding  such application by the Secured Party, and this Agreement shall
continue  to be  effective  or be  reinstated,  as the case  may be,  as to such
Obligations,  all as though such  application  by the Secured Party had not been
made.

         This  Agreement  shall be construed in accordance  with and governed by
the  laws of the  State  of  Delaware  applicable  to  contracts  made and to be
performed entirely within such State, subject,  however, to the applicability of
the UCC of any  jurisdiction in which any Collateral may be located at any given
time if  required  under the UCC.  Whenever  possible,  each  provision  of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under  applicable law, such provision shall be ineffective to the extent
of such  prohibition or invalidity,  without  invalidating the remainder of such
provision or the remaining provisions of this Agreement.

         The rights and remedies of, and the privileges and actions permitted to
be taken  hereunder  by,  the  Secured  Party  may only be  undertaken  with the
unanimous  consent of the Secured  Party,  and no  individual  Secured Party may
exercise  any such right or remedy or  undertake  any such  privilege  or action
without the express consent of the other Secured Party hereunder.

         The rights and privileges of the Secured Party hereunder shall inure to
the benefit of its successors and assigns.

         This Agreement may be executed in any number of counterparts and by the
different  parties hereto on separate  counterparts,  and each such  counterpart
shall be deemed to be an  original,  but all such  counterparts  shall  together
constitute  one and the same  Agreement.  Debtor  represents and warrants to the
Secured Party that the  representations and warranties made by Debtor herein are
true and correct.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
                             SIGNATURE PAGE FOLLOWS]

                                       9
<PAGE>

         IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first written above.

                     DEBTOR:

                     RCG COMPANIES INCORPORATED

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

                     SECURED PARTY:

                     [TERRA NETWORKS ASOCIADAS, S.L.]

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

                     [AMADEUS AMERICAS, INC. f/k/a AMADEUS NMC HOLDING, INC.]

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

                     [AVANTI MANAGEMENT, INC.]

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

                     [LIBRA SECURITIES, LLC]

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

                                       10
<PAGE>

                                   SCHEDULE 3

                              FINANCING STATEMENTS
                              --------------------

None.Exhibit 4.2

                           CERTIFICATE OF DESIGNATION,
                          OF THE RIGHTS AND PREFERENCES
                                       OF
                      SERIES B CONVERTIBLE PREFERRED STOCK
                                       OF
                              INNOVA HOLDINGS, INC.
      Innova Holdings, Inc., a corporation organized and existing under the laws
of the State of Delaware (the "Company"), hereby certifies that the following
resolutions were adopted by the Board of Directors of the Company pursuant to
the authority of the Board of Directors as required by Section 151 of the
Delaware General Corporation Law (the "DGCL").

      RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Company (the "Board of Directors" or the "Board") in
accordance with the provisions of its Articles of Incorporation and Bylaws, each
as amended through the date hereof, the Board of Directors hereby authorizes a
series of the Company's previously authorized Preferred Stock, $.001 par value
(the "Preferred Stock"), and hereby states the designation and number of shares,
and fixes the relative rights, preferences, privileges, powers and restrictions
thereof as follows:

I.  CERTAIN DEFINITIONS

      For purposes of this Certificate of Designation, capitalized terms are
defined in this Certificate of Designation or shall have the following meanings:

      "Change of Control" means the acquisition, directly or indirectly, by any
Person of ownership of, or the power to direct the exercise of voting power with
respect to, a majority of the issued and outstanding voting shares of the
Company, excluding any acquisition arising from the conversion into Common Stock
of Series B Preferred Stock.

      "Common Stock" means the common stock of the Company, par value $.001 per
share.

       "Issuance Date" means the date of initial issuance of the Series B
Preferred Stock.

      "Per Share Market Value" of the Common Stock means on any particular date
(a) the last sale price of shares of Common Stock on such date or, if no such
sale takes place on such date, the last sale price on the most recent prior
date, in each case as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading, or (b)
if the Common Stock is not then listed or admitted to trading on any national
securities exchange, the closing bid price per share as reported by Nasdaq, or
(c) if the Common Stock is not then listed or admitted to trading on the Nasdaq,
the closing bid price per share of the Common Stock on such date as reported on
the OTCBB or if there is no such price on such date, then the last bid price on

                                      A-1
<PAGE>

the date nearest preceding such date, or (d) if the Common Stock is not quoted
on the OTCBB, the closing bid price for a share of Common Stock on such date in
the over-the-counter market as reported by the Pinksheets LLC (or similar
organization or agency succeeding to its functions of reporting prices) or if
there is no such price on such date, then the last bid price on the date nearest
preceding such date, or (e) if the Common Stock is no longer publicly traded,
the fair market value of a share of the Common Stock as determined by an
Appraiser as defined in Paragraph selected in good faith by the holders of a
majority of the Series B Preferred Stock; provided, however, that the Company,
after receipt of the determination by such Appraiser, shall have the right to
select an additional Appraiser, in which case, the fair market value shall be
equal to the average of the determinations by each such Appraiser.

      "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

      "Trading Day" means (a) a day on which the Common Stock is quoted on the
OTCBB or principal stock exchange on which the Common Stock has been listed, or
(b) if the Common Stock is not quoted on the OTCBB or any stock exchange, a day
on which the Common Stock is quoted in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. ("NASD"), or (c) if the
Common Stock is not quoted on the NASD, a day on which the Common Stock is
quoted in the over-the-counter market as reported by the Pinksheets LLC (or any
similar organization or agency succeeding its functions of reporting prices).

                           II. DESIGNATION AND AMOUNT

      The designation of this series, which consists of five hundred twenty five
thousand (525,000) shares of Preferred Stock, is the Series B 5% Convertible
Preferred Stock (the "Series B Preferred Stock") and the stated value shall be
U.S. one dollar ($1.00) per share (the "Stated Value").

                                 III. DIVIDENDS

      The holder of the shares of Series B Preferred Stock shall be entitled to
receive dividends at the rate of five percent (5%) per annum on the stated value
of the Series B Preferred Stock before dividends are declared on any other
outstanding shares of stock of the Company. The dividends so payable will be
paid on each anniversary date of the Issuance Date to the person in whose name
the Series B Preferred Stock is registered. At the time such dividends are
declared and payable, the Company, in its sole discretion, may elect to pay the
dividends in cash or in the form of Common Stock. If paid in the form of Common
Stock, the amount of stock to be issued will be calculated as follows: the value
of the stock shall be the Closing Bid Price on the date the dividend is declared
and a number of shares of Common Stock with a value equal to the amount of the
dividend shall be issued. No fractional shares will be issued; therefore, in the
event that the value of the Common Stock per share does not equal the dividend,
the Company will pay the balance in cash.

                                      A-2
<PAGE>

                                 IV. CONVERSION

      (a) Each outstanding share of Series B Preferred Stock shall be
convertible into the number of shares of Common Stock determined by dividing the
Stated Value by the Conversion Price as defined below, at the option of the
Holder in whole or in part, at any time commencing on or after the Issuance
Date; provided that any conversion under this section must be made during the
ten (10) day period immediately following the date on which the Company files
with the Securities and Exchange Commission any periodic report on form 10-QSB,
10-KSB or the equivalent form; provided further that, any conversion under this
Section IV(a) shall be for a minimum Stated Value of $500.00 of Series B
Preferred Stock. The Holder shall effect conversions by sending the form of
conversion notice attached hereto as Appendix I (the "Notice of Conversion") in
the manner set forth in Section IV(j). Each Notice of Conversion shall specify
the Stated Value of Series B Preferred Stock to be converted. The date on which
such conversion is to be effected (the "Conversion Date") shall be on the date
the Notice of Conversion is delivered pursuant to Section IV(j) hereof. Except
as provided herein, each Notice of Conversion, once given, shall be irrevocable.
Upon the entire conversion of the Series B Preferred Stock, the certificates for
such Series B Preferred Stock shall be returned to the Company for cancellation.

      (b) Not later than ten (10) Business Days after the Conversion Date, the
Company will deliver to the Holder (i) a certificate or certificates
representing the number of shares of Common Stock being acquired upon the
conversion of the Series B Preferred Stock and (ii) once received from the
Company, the Series B Preferred Stock in principal amount equal to the principal
amount of the Series B Preferred Stock not converted; provided, however, that
the Company shall not be obligated to issue certificates evidencing the shares
of Common Stock issuable upon conversion of any Series B Preferred Stock until
the Series B Preferred Stock are either delivered for conversion to the Company
or any transfer agent for the Series B Preferred Stock or Common Stock, or the
Holder notifies the Company that such Series B Preferred Stock certificates have
been lost, stolen or destroyed and provides an agreement reasonably acceptable
to the Company to indemnify the Company from any loss incurred by it in
connection therewith. In the case of a conversion pursuant to a Notice of
Conversion, if such certificate or certificates are not delivered by the date
required under this Section IV(b), the Holder shall be entitled, by providing
written notice to the Company at any time on or before its receipt of such
certificate or certificates thereafter, to rescind such conversion, in which
event the Company shall immediately return the Series B Preferred Stock tendered
for conversion.

      (c) The Conversion Price for each share of Series B Preferred Stock in
effect on any Conversion Date shall be the lesser of (a) seventy five percent
(75%) of the average closing bid price of the Common Stock over the twenty (20)
trading days immediately preceding the date of conversion or (b) $0.005. For
purposes of determining the closing bid price on any day, reference shall be to
the closing bid price for a share of Common Stock on such date on the NASD OTC
Bulletin Board, as reported on Bloomberg, L.P. (or similar organization or
agency succeeding to its functions of reporting prices).

                                      A-3
<PAGE>

      (d) (i) If the Company, at any time while any Series B Preferred Stock are
outstanding, (a) shall pay a stock dividend or otherwise make a distribution or
distributions on shares of its Junior Securities (as defined below) payable in
shares of its capital stock (whether payable in shares of its Common Stock or of
capital stock of any class), (b) subdivide outstanding shares of Common Stock
into a larger number of shares, (c) combine outstanding shares of Common Stock
into a smaller number of shares, or (d) issue by reclassification of shares of
Common Stock any shares of capital stock of the Company, the Conversion Price
designated in Section IV(a) shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock of the Company
outstanding before such event and of which the denominator shall be the number
of shares of Common Stock outstanding after such event. Any adjustment made
pursuant to this Section IV(d)(j) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.

            (ii) If the Company, at any time while Series B Preferred Stock are
outstanding, shall distribute to all holders of Common Stock (and not to Holders
of Series B Preferred Stock) evidences of its indebtedness or assets or rights
or warrants to subscribe for or purchase any security, then in each such case
the Conversion Price at which each Series B Preferred Stock shall thereafter be
convertible shall be determined by multiplying the Conversion Price in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution by a fraction of which the denominator
shall be the Per Share Market Value of Common Stock determined as of the record
date mentioned above, and of which the numerator shall be such Per Share Market
Value of the Common Stock on such record date less the then fair market value at
such record date of the portion of such assets or evidence of indebtedness so
distributed applicable to one outstanding share of Common Stock as determined by
the Board of Directors in good faith; provided, however that in the event of a
distribution exceeding ten percent (10%) of the net assets of the Company, such
fair market value shall be determined by a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Company) (an "Appraiser") selected in
good faith by the Holders of a majority of the principal amount of the Series B
Preferred Stock then outstanding; and provided, further, that the Company, after
receipt of the determination by such Appraiser shall have the right to select an
additional Appraiser, in which case the fair market value shall be equal to the
average of the determinations by each such Appraiser. In either case the
adjustments shall be described in a statement provided to the Holder and all
other Holders of Series B Preferred Stock of the portion of assets or evidences
of indebtedness so distributed or such subscription rights applicable to one
share of Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above.

                                      A-4
<PAGE>

            (iii) All calculations under this Article IV shall be made to the
nearest 1/1000th of a cent or the nearest 1/1000th of a share, as the case may
be. Any calculation resulting in a fraction shall be rounded up to the next cent
or share.

             (iv) Whenever the Conversion Price is adjusted pursuant to Section
IV(d)(ii) or (iii), the Company shall within ten (10) days after the
determination of the new Fixed Conversion Price mail and fax to the Holder and
to each other Holder of Series B Preferred Stock, a notice setting forth the
Fixed Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.

            (v) In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person, the sale or
transfer of all or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then each holder of Series B Preferred Stock
then outstanding shall have the right thereafter to convert such Series B
Preferred Stock only into the shares of stock and other securities and property
receivable upon or deemed to be held by holders of Common Stock following such
reclassification, consolidation, merger, sale, transfer or share exchange
(except in the event the property is cash, then the Holder shall have the right
to convert the Series B Preferred Stock and receive cash in the same manner as
other stockholders), and the Holder shall be entitled upon such event to receive
such amount of securities or property as the shares of the Common Stock into
which such Series B Preferred Stock could have been converted immediately prior
to such reclassification, consolidation, merger, sale, transfer or share
exchange would have been entitled. The terms of any such consolidation, merger,
sale, transfer or share exchange shall include such terms so as to continue to
give to the holder the right to receive the securities or property set forth in
this Section IV(d)(v) upon any conversion following such consolidation, merger,
sale, transfer or share exchange. This provision shall similarly apply to
successive reclassifications, consolidations, mergers, sales, transfers or share
exchanges.

            (vi)  If:

                  (A)   the Company shall declare a dividend (or any other
                        distribution) on its Common Stock; or

                  (B)   the Company shall declare a special nonrecurring cash
                        dividend on or a redemption of its Common Stock; or

                  (C)   the Company shall authorize the granting to all holders
                        of the Common Stock rights or warrants to subscribe for
                        or purchase any shares of capital stock of any class or
                        of any rights; or

                  (D)   the approval of any  stockholders of the Company shall
                        be required in  connection  with any  reclassification
                        of the  Common  Stock  of the  Company  (other  than a
                        subdivision or combination of the  outstanding  shares
                        of  Common  Stock),  any  consolidation  or  merger to
                        which the Company is a party,  any sale or transfer of
                        all  or  substantially   all  of  the  assets  of  the
                        Company,  or any compulsory share exchange whereby the
                        Common Stock is converted into other securities,  cash

                                      A-5
<PAGE>

                        or property; or

                  (E)   the Company shall authorize the voluntary or involuntary
                        dissolution, liquidation or winding-up of the affairs of
                        the Company;

then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Series B Preferred Stock, and shall cause to be
mailed and faxed to the Holders of Series B Preferred Stock at their last
addresses as it shall appear upon the Series B Preferred stock register, at
least thirty (30) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined, or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding-up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding-up; provided,
however, that the failure to mail such notice or any defect therein or in the
mailing thereof shall not affect the validity of the corporate action required
to be specified in such notice.

       (e) Intentionally omitted.

       (f) The Company covenants that it will at all times reserve and keep
available out of its authorized and unissued Common Stock solely for the purpose
of issuance upon conversion of Series B Preferred Stock as herein provided, free
from preemptive rights or any other actual contingent purchase rights of persons
other than the Holders of Series B Preferred Stock, such number of shares of
Common Stock as shall be issuable (taking into account the adjustments and
restrictions of Section IV(d) hereof) upon the conversion of all outstanding
shares of Series B Preferred Stock. The Company covenants that all shares of
Common Stock that shall be so issuable shall, upon issue, be duly and validly
authorized, issued and fully paid and nonassessable.

      (g) No fractional shares of Common Stock shall be issuable upon a
conversion hereunder and the number of shares to be issued shall be rounded up
to the nearest whole share. If a fractional share interest arises upon any
conversion hereunder, the Company shall eliminate such fractional share interest
by issuing the Holder an additional full share of Common Stock.

                                      A-6
<PAGE>

      (h) The issuance of certificates for shares of Common Stock on conversion
of Series B Preferred Stock shall be made without charge to the Holder for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided that the Company shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate upon conversion in a name other
than that of the Holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

      (i) Series B Preferred Stock converted into Common Stock shall be canceled
upon conversion.

      (j) Each Notice of Conversion shall be given by facsimile to the Company
no later than 4:00 pm EST. Any such notice shall be deemed given and effective
upon the transmission of such facsimile at the facsimile telephone number
specified in the Purchase Agreement. In the event that the Company receives the
Notice of Conversion after 4:00 p.m. EST, the Conversion Date shall be deemed to
be the next Business Day. In the event that the Company receives the Notice of
Conversion after the end of the Business Day, notice will be deemed to have been
given the next Business Day.

V.    REDEMPTION

      At any time after the Issuance Date through the fifth (5th) anniversary of
the Issuance Date, the Company shall have the option to redeem any unconverted
shares of the Series B Preferred Stock, either in part or whole, upon no less
than thirty (30) days written notice thereof given to the Holders thereof, at an
amount equal to one hundred thirty percent (130%) of the stated value of the
unconverted Series B Preferred Stock (the "Redemption Price") plus accrued and
unpaid dividends.

      No holder of Series B Preferred Stock may demand that the Series B
Preferred Stock be redeemed.

                                    VI. RANK

      The Series B Preferred Stock shall, as to distribution of assets upon
liquidation, dissolution or winding up of the Company, rank (i) prior to the
Company's Common Stock (ii) prior to any class or series of capital stock of the
Company hereafter created that, by its terms, ranks junior to the Series B
Preferred Stock ("Junior Securities"); (iii) junior to the Series A Preferred
Stock and any class or series of capital stock of the Company hereafter created
which by its terms ranks senior to the Series B Preferred Stock ("Senior
Securities"); (iv) pari passu with any other series of preferred stock of the
Company hereafter created which by its terms ranks on a parity ("Pari Passu
Securities") with the Series B Preferred Stock.

                                      A-7
<PAGE>

                           VII. LIQUIDATION PREFERENCE

      If the Company shall commence a voluntary case under the U.S. Federal
bankruptcy laws or any other applicable bankruptcy, insolvency or similar law,
or consent to the entry of an order for relief in an involuntary case under any
law or to the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Company or of any
substantial part of its property, or make an assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as they
become due, or if a decree or order for relief in respect of the Company shall
be entered by a court having jurisdiction in the premises in an involuntary case
under the U.S. Federal bankruptcy laws or any other applicable bankruptcy,
insolvency or similar law resulting in the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or ordering
the winding up or liquidation of its affairs, and any such decree or order shall
be unstayed and in effect for a period of sixty (60) consecutive days and, on
account of any such event, the Company shall liquidate, dissolve or wind up, or
if the Company shall otherwise liquidate, dissolve or wind up, including, but
not limited to, the sale or transfer of all or substantially all of the
Company's assets in one transaction or in a series of related transactions (a
"Liquidation Event"), no distribution shall be made to the holders of any shares
of capital stock of the Company (other than Senior Securities and Pari Passu
Securities) upon liquidation, dissolution or winding up unless prior thereto the
Holders of shares of Series B Preferred Stock shall have received the
Liquidation Preference (as defined below) with respect to each share. If, upon
the occurrence of a Liquidation Event, the assets and funds available for
distribution among the Holders of the Series B Preferred Stock and Holders of
Pari Passu Securities shall be insufficient to permit the payment to such
holders of the preferential amounts payable thereon, then the entire assets and
funds of the Company legally available for distribution to the Series B
Preferred Stock and the Pari Passu Securities shall be distributed ratably among
such shares in proportion to the ratio that the Liquidation Preference payable
on each such share bears to the aggregate Liquidation Preference payable on all
such 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 entity nor the
sale or transfer by the Company of substantially all of its assets shall, for
the purposes hereof, be deemed to be a liquidation, dissolution or winding up of
the Company. The "Liquidation Preference" with respect to a share of Series B
Preferred Stock means an amount equal to the Stated Value thereof. The
Liquidation Preference with respect to any Pari Passu Securities shall be as set
forth in the Certificate of Designation filed in respect thereof.

                                      A-8
<PAGE>

                               VIII. VOTING RIGHTS

      The Holders of the Series B Preferred Stock have no voting power
whatsoever, except as provided by the DGCL. To the extent that under the DGCLthe
vote of the Holders of the Series B Preferred Stock, voting separately as a
class or series, as applicable, is required to authorize a given action of the
Company, the affirmative vote or consent of the Holders of at least a majority
of the then outstanding shares of the Series B Preferred Stock represented at a
duly held meeting at which a quorum is present or by written consent of the
Holders of at least a majority of the then outstanding shares of Series B
Preferred Stock (except as otherwise may be required under the DGCL) shall
constitute the approval of such action by the class. To the extent that under
the DGCL Holders of the Series B Preferred Stock are entitled to vote on a
matter with holders of Common Stock, voting together as one class, each share of
Series B Preferred Stock shall be entitled to a number of votes equal to the
number of shares of Common Stock into which it is then convertible (subject to
the limitations contained in Article IV) using the record date for the taking of
such vote of shareholders as the date as of which the Conversion Price is
calculated.

                                IX. MISCELLANEOUS

      (a) If any shares of Series B Preferred Stock are converted pursuant to
Article IV, the shares so converted shall be canceled, shall return to the
status of authorized, but unissued preferred stock of no designated series.

      (b) Upon receipt by the Company of (i) evidence of the loss, theft,
destruction or mutilation of any Preferred Stock certificate(s) and (ii) (y) in
the case of loss, theft or destruction, of indemnity (without any bond or other
security) reasonably satisfactory to the Company, or (z) 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. However, the Company shall not be
obligated to reissue such lost or stolen Preferred Stock certificate(s) if the
Holder contemporaneously requests the Company to convert such Series B Preferred
Stock.

      (c) Upon submission of a Notice of Conversion by a Holder of Series B
Preferred Stock, (i) the shares covered thereby shall be deemed converted into
shares of Common Stock and (ii) the Holder's rights as a Holder of such
converted shares of Series B Preferred Stock shall cease and terminate,
excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity
to such Holder because of a failure by the Company to comply with the terms of
this Certificate of Designation. Notwithstanding the foregoing, if a Holder has
not received certificates for all shares of Common Stock prior to the tenth
(10th) business day after the expiration of the Delivery Period with respect to
a conversion of Series B Preferred Stock for any reason, then (unless the Holder
otherwise elects to retain its status as a holder of Common Stock by so
notifying the Company within five (5) business days after the expiration of such
ten (10) business day period) the Holder shall regain the rights of a Holder of
Series B Preferred Stock with respect to such unconverted shares of Series B
Preferred Stock and the Company shall, as soon as practicable, return such
unconverted shares to the Holder. In all cases, the Holder shall retain all of
its rights and remedies for the Company's failure to convert Series B Preferred
Stock.

                                      A-9
<PAGE>

      (d) The remedies provided in this Certificate of Designation shall be
cumulative and in addition to all other remedies available under this
Certificate of Designation, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and 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 Designation. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the
Holders of Series B Preferred Stock and that the remedy at law for any such
breach may be inadequate. The Company therefore agrees, in the event of any such
breach or threatened breach, that the Holders of Series B Preferred Stock 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.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      A-10
<PAGE>

      IN WITNESS WHEREOF, the undersigned, being the Chief Executive Officer and
Secretary of Innova Holdings, Inc., hereby declare under penalty of perjury that
the foregoing is a true and correct copy of the Certificate of Designation of
the Rights and Preferences of the Series B Convertible Preferred Stock of Innova
Holdings, Inc. duly adopted by the Board of Directors of Innova Holdings, Inc.
on September 21, 2004, and this Certificate of Designation is executed by the
undersigned on behalf of Innova Holdings, Inc. this 8th day of February, 2005.

                                       Innova Holdings, Inc.

                                       By: /s/ Walter Weisel
                                            -----------------
                                           Walter Weisel, CEO

                                       By: /s/ Sheri Aws
                                           -----------------------------
                                           Sheri Aws,  Secretary

                                      A-11

<PAGE>

                                   APPENDIX I

                              NOTICE OF CONVERSION
                          AT THE ELECTION OF THE HOLDER

(To be Executed by the Registered Holder
in order to Convert the Series B Preferred Stock of Innova Holdings, Inc.)

The undersigned hereby irrevocably elects to convert the Series B Preferred
Stock into shares of Common Stock, par value $.001 per share (the "Common
Stock"), of Innova Holdings, Inc. (the "Company") according to the provisions of
the Certificate of Designation hereof, as of the date written below. If shares
are to be issued in the name of a person other than undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith.

Conversion calculations:

                         ----------------------------------------------
                               Date to Effect Conversion

                         ----------------------------------------------
                               Number of Shares to be Converted

                         ----------------------------------------------
                               Applicable Conversion Price

                         ----------------------------------------------
                               Number of Shares to be Issued Upon Conversion

                         ----------------------------------------------
                               Signature

                         ----------------------------------------------
                               Name

                         ----------------------------------------------
                              Address

                                      A-12

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