8-K

                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549

                               FORM 8-K

                            CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported) August 14, 1998.


                         SEPRAGEN CORPORATION
        (Exact name of registrant as specified in its charter)


                                              
California             0-25726                68-0073366
(State or other        (Commission            (IRS Employer
jurisdiction of        File Number)           Identification
incorporation)                                No.)



                        30689 Huntwood Avenue
                      Hayward, California 94544
          (Address of principal executive office, zip code)


Registrant's telephone number, including area code:  (510) 476-0760


(Former name or former address, if changed since last report):  N/A


                      THIS IS PAGE 1 OF 18 PAGES


Item 5

Other Events

          In August 1998, the Company completed a debt-restructuring
transaction whereby the Company borrowed $550,000 from Mr. K.
Charles Janac pursuant to a Convertible Secured Promissory Note
issued by the Company (the "Note") in the principal amount of
$550,000 and bearing interest at the rate of 9.75% per annum.  The
Note is convertible into shares of Class A Common Stock at the
option of Mr. Janac at any time before December 15, 1998 by
converting the principal balance and any unpaid interest due under
the Note into Class A Common Stock at the rate of $0.468 per share. 
In addition, as further consideration for the loan of funds to the
Company, the Company issued to Mr. Janac a warrant, exercisable at
any time on or before August 18, 2003, to purchase up to 234,667
shares of Class A Common Stock at $.468 per share (the "Warrants"). 
The total number of shares of Class A Common Stock issuable upon
conversion of the Note or exercise of the Warrants are subject to
adjustment in the event of recapitalization, stock dividends, or
similar events.  As security for the Note, the Company entered into
a Security Agreement granting Mr. Janac a first priority security
interest in the property, tangible and intangible, of the Company,
as well as a Patent and Trademark Mortgage granting Mr. Janac a
security interest in all the patents and trademarks of the Company.

          All principal and accrued interest under the Note is due
and payable on or before December 15, 1998.

          The business address of Mr. Janac is 651 River Oaks
Parkway, San Jose, CA 95134.

          The Company used the funds loaned by Mr. Janac to retire
$532,242.47 of existing debt incurred by the Company in connection
with a certain bridge financing originally undertaken by the Company
in October of 1997, to pay legal fees and costs of the transaction,
and approximately $7,000 was utilized for working capital.

Item 7

Financial Statements and Exhibits

          The following Exhibits are filed as part of this report:

          3.3 Certificate of Determination for Series A Preferred
Stock of the Company.


Item 9

Sales of Equity Securities Pursuant to Regulation S.

          1.   On September 1, 1998, the Company sold 175,009 Shares
of Series A Preferred Stock.

          2.   All of the shares of Series A Preferred Stock were
sold to Anchor Products Limited of Hamilton, New Zealand ("Anchor").
 The acquisition of Series A Preferred Stock by Anchor was
consummated in connection with the execution of a Commercial License
Agreement between the Company and Anchor, whereby the Company
licensed Anchor a technology that isolates proteins from whey, a low
value cheese by-product.

          3.   The shares of Series A Preferred Stock were sold for
cash in the aggregate amount of $500,000 ($2.857 per share).  There
were no underwriting discounts or commissions paid in connection
with the transaction.

          4.   The shares of Series A Preferred Stock were sold
pursuant to exemptions from registration under Section 4(2) and
Regulation S under the Securities Act of 1933, in a transaction that
was not publicly offered.  Anchor is a New Zealand corporation.

          5.   The Company's Series A Preferred Stock provides for
both a 7% dividend and liquidation preferences.  The dividend is
payable from time to time at the election of the Board of Directors
of the Company subject to the Company retaining sufficient earnings
and profits.  The Preferred Stock is also convertible on or before
September 30, 2000 into Class A Common Stock, at the conversion rate
of $2.86 per share.  On any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, the holders of Series A
Preferred Shares shall receive, out of the assets of the Company,
the sum of $2.86 per Series A Preferred Share, plus an amount equal
to any dividends accrued and unpaid on those Series A Preferred
Shares, before any payment shall be made or any assets distributed
to the holders of Common Stock.  The Series A Preferred Shares shall
be redeemable at the option of the holders of the Series A Preferred
Shares or the Company commencing September 30, 2003 and expiring
December 31, 2008, at the cash price of $2.86 per share, plus any
accrued and unpaid dividends on the Series A Preferred Shares which
are redeemed.  In addition, each share of Series A Preferred Stock
shall be automatically converted into one (1) share of Class A
Common Stock, if not previously redeemed, on January 1, 2009, or at
any time the closing bid price per share of the Company's Class A
Common Stock shall average at least $3.86 per share over ninety (90)
consecutive trading days prior to January 1, 2004.  The conversion
ratio for the Series A Preferred Stock shall be adjusted in the
event of recapitalization, stock dividend, or any similar event
effecting the Class A Common Stock.

                              SIGNATURES

 Pursuant to the requirements of the Securities Exchange Act of 1934
the Registrant has caused this report to be signed on its behalf by
the undersigned duly authorized.

                                   SEPRAGEN CORPORATION

                                   
Date: September 3, 1998            By:  /S/ Vinit Saxena
                                     Vinit Saxena, Chief Executive
                                     Officer, President, 
                                     Principal Financial Officer
                                     and Chief Accounting Officer

                                     





                          INDEX TO EXHIBITS

                                                  Sequential
No.                 Description                   Page No.

3.3                 Certificate of Determination      6
                    for Series A Preferred Stock
                    of the Company.

EX-3

                   CERTIFICATE OF DETERMINATION FOR
                         SEPRAGEN CORPORATION
                       A California Corporation

          Vinit Saxena, President, and Armin Ramel, Secretary,
certify that:  

          1.   They are the President and the Secretary,
respectively, of Sepragen Corporation, a California corporation.  

          2.   The authorized number of the corporation's Preferred
shares is 5,000,000, and the number of shares constituting Series A
Preferred (that is the series affected by this Certificate of
Determination and the resolution set forth below) is 1,000,000. 
None of the shares of Series A Preferred have been issued.  
 
          3.   Pursuant to authority granted by the corporation's
Articles of Incorporation, the following resolution has been duly
adopted and approved by the Board of Directors.  

                  RESOLUTION OF BOARD OF DIRECTORS  
 
           WHEREAS, the Articles of Incorporation of this
corporation provide for a class of shares known as Preferred shares,
issuable from time to time in one or more series; and  
 
          WHEREAS, the Board of Directors of this  is authorized to
determine or alter the rights, preferences, privileges, and
restrictions granted to or imposed on any wholly unissued series of
Preferred shares, to fix the number of shares constituting any such
series, and to determine the designation of that series, or any of
them; and  
 
          WHEREAS, this corporation has not issued any shares of
Preferred shares and the Board of Directors of this corporation
desires, pursuant to its authority, to determine and fix the rights,
preferences, privileges, and restrictions relating to the initial
series of Preferred shares and the number of shares constituting and
the designation of the series;  
 
    IT IS THEREFORE RESOLVED, that the Board of Directors authorizes
    the original issue of a series of Preferred shares that shall be
    designated and known as Series A Preferred.  The number of
    shares of this series shall be 1,000,000. All shares in this
    series are subject to the following rights, preferences,
    privileges, and restrictions:  

     (a)   The holders of outstanding Series A Preferred shares
    shall be entitled to receive, when and as declared by the Board
    of Directors, out of any assets at the time legally available,
    dividends at the annual rate of $.20 per Series A Preferred
    share, payable on the 1st day of each January to holders of
    Series A Preferred shares of record on a date not more than
    sixty (60) nor fewer than ten (10) days preceding each
    respective payment date as specified by the Board of Directors
    or, if not so specified, as provided by law. Dividends shall
    accrue on each Series A Preferred share from the date of its
    original issuance and shall accrue from day to day, whether or
    not earned or declared. Dividends shall be cumulative so that if
    dividends in respect of any previous dividend period and for the
    current dividend period at the annual rate per share shall not
    have been paid or declared and set apart for all Series A
    Preferred shares at the time outstanding, the deficiency shall
    be fully paid or declared and set apart for those shares before
    the corporation makes any distribution to holders of Class A
    Common Stock. 

     "Distribution" in this paragraph (a) means the transfer of cash
    or property without consideration, whether by way of dividend or
    otherwise (except a dividend in shares of the corporation that
    are junior to the Series A Preferred shares as to dividends or
    assets) or the purchase or redemption of shares of the
    corporation for cash or property (except such junior shares),
    including any such transfer, purchase, or redemption by a
    subsidiary of the corporation. The time of any distribution by
    way of dividend shall be the date the dividend is declared and
    the time of any distribution by purchase or redemption of shares
    or otherwise than by dividend shall be the day cash or property
    is transferred by the corporation, whether or not pursuant to a
    contract of an earlier date; provided that when a debt
    obligation that is a security is issued in exchange for shares,
    the time of the distribution is the date when the corporation
    acquires the shares in that exchange.

     (b)  On any voluntary or involuntary liquidation, dissolution,
    or winding up of the corporation, the holders of the Series A
    Preferred shares shall receive out of assets of the corporation,
    whether those assets are capital or surplus of any nature, the
    sum of $2.86 per Series A Preferred share, plus an amount equal
    to any dividends accrued and unpaid on those Series A Preferred
    shares, as provided in paragraph (a) of this Certificate, to the
    date that payment is made available to the holders of Series A
    Preferred shares, whether earned or declared or not, and no
    more, before any payment shall be made or any assets distributed
    to the holders of Common Stock. 

          If on liquidation, dissolution, or winding up of the
    corporation, the assets so distributed among the holders of
    Series A Preferred shares shall be insufficient to permit full
    payment to those shareholders of the full preferential amounts,
    then the entire assets of the corporation to be distributed
    shall be distributed ratably among the holders of Series A
    Preferred shares. 

          In the event of any voluntary or involuntary liquidation,
    dissolution, or winding up of the corporation, subject to all of
    the preferential rights of the holders of Series A Preferred
    shares on distribution or otherwise, the holders of Common Stock
    shall be entitled to receive, ratably, all remaining assets of
    the corporation. 

          A consolidation or merger of the corporation with or into
    any other corporation or corporations, or a sale of all or
    substantially all of the assets of the corporation, shall not be
    deemed to be a liquidation, dissolution, or winding up of the
    corporation within the meaning of this paragraph (b).

     (c)  The Series A Preferred shares shall be redeemable, at the
    option of the respective holders of the shares or the
    corporation commencing September 30, 2003 and expiring December
    31, 2008, at the cash price of $2.86 per share, plus any accrued
    but unpaid dividends on the Series A Preferred shares which are
    redeemed.  The holders of Preferred shares shall give notice of
    exercise of the option to redeem the Series A Preferred shares,
    by tendering such shares to the corporation at the office of the
    corporation or any transfer agent for the shares.  The
    corporation may elect the option to redeem by giving notice to
    the respective holders of Series A Preferred shares at the
    address of the registered holders on the stock transfer books of
    the corporation with instructions of how to exchange Series A
    Preferred shares for Class A Common Stock Certificates.  The
    corporation or its transfer agent, as the case may be, shall
    exchange such certificate(s) for a certificate or certificates
    representing an equal number of shares of Class A Common Stock. 
    Shares of Series A Preferred shall be deemed to have been
    converted immediately prior to the close of business on the day
    upon which the corporation declares that the targets have been
    met.  The person entitled to receive the Class A Common Stock
    issuable upon such conversion shall be treated for all purposes
    as the record holder of such Class A Common Stock at such time. 
    Redemption consideration will only be payable to the registered
    holders on the date such registered holder tenders such shares
    to the corporation at the office of the corporation or any
    transfer agent of the corporation.  Provided, however, the
    corporation may only redeem shares out of assets legally
    available therefor.  If, at the time any shareholder seeks to
    redeem his Series A Preferred shares the corporation is not
    legally able to redeem such shares under Chapter 5 (commencing
    with Section 500) of the California Corporations Code, such
    shareholder shall retain the right to redeem the shareholder's
    shares of Series A Preferred until a period ending ninety (90)
    days after such shareholder is notified by the corporation that
    the corporation is legally able to redeem the shares.

     (d)  Subject to Subsection (c) above, each share of Series A
    Preferred shall be automatically converted into Class A Common
    Stock, if not previously redeemed, on January 1, 2009 or at any
    time the Bid Price per share (as defined below) of the
    corporation's Class A Common Stock shall average at least $3.86
    per share for ninety (90) consecutive trading days prior to
    January 1, 2004.  In addition, the holders of Series A Preferred
    shares shall have conversion rights on or after December 1,
    1999, all such conversions to occur in the following manner:

          (1)  On or before September 30, 2000, the Series A
    Preferred shares shall be convertible at the option of the
    respective holders of the shares, or upon the vote of a majority
    of the outstanding Series A Preferred shares, at the office of
    the corporation or any transfer agent for those shares, into
    fully paid and nonassessable Class A Common Stock (calculated to
    the nearest one-hundredth of a share, fractions of less than
    one-hundredth of a share being disregarded) of the corporation,
    at the conversion price in effect at the time of conversion
    determined as provided below, each Series A Preferred share
    being taken at $2.86 for the purpose of conversion.  The Series
    A Preferred shares shall be automatically converted into shares
    of Class A Common Stock, if not previously redeemed, on January
    1, 2009.  The price at which Class A Common Stock shall be
    deliverable on conversion shall be initially $2.86 per share. 
    The initial conversion price shall be subject to adjustment from
    time to time in certain instances, as provided below. The
    corporation shall make no payment or adjustment on account of
    any dividends accrued and unpaid on the Series A Preferred
    shares surrendered for conversion. 

          (2)  Before any Series A Preferred shares may be converted
    into Class A Common Stock at the option of the holder, the
    holder must surrender the certificate or certificates for those
    shares, duly endorsed in blank or accompanied by proper
    instruments of transfer, at the office of the corporation or of
    any transfer agent for the Series A Preferred shares. The holder
    shall also give written notice to the corporation at that office
    that the holder elects to convert a specified number or all of
    the shares represented by the surrendered certificate(s). The
    notice shall also specify the name or names in which the holder
    wishes the certificate or certificates for the Class A Common
    Stock to be issued. If a name specified is not that of the
    holder, the notice shall also state the address of the new
    holder and any other information required by law. The
    corporation shall, as soon as practicable thereafter, issue and
    deliver at that office to the holder of Series A Preferred
    shares converted, or to that holder's nominee or nominees,
    certificates for the number of full Class A Common Stock to
    which the holder shall be entitled to receive, together with a
    scrip certificate or cash in lieu of any fraction of a share as
    provided below. Conversion shall be deemed to have been made as
    of the date the Series A Preferred shares are surrendered for
    conversion, and the person or persons entitled to receive the
    Class A Common Stock issuable on conversion shall be treated for
    all purposes as the record holder or holders of those shares of
    Class A Common Stock on that date.  

          (3)  If the conversion price in effect immediately prior
    to the close of business on any date shall exceed by as much as
    $.25 the amount determined at the close of business on that date
    by dividing:  

               i)   a sum equal to $20,000,000 plus the aggregate of
    the amounts of all consideration received by the corporation on
    all classes and issues of common stock after December 31, 1998,
    by  

               ii)  the total number of outstanding shares of common
    stock of all classes and issues.  

    the conversion price shall be reduced, effective at the close of
    business on the then-effective date, by the largest multiple of
    ten cents ($.10) contained in the sum by which the
    then-effective conversion price exceeds the amount so
    determined.  
 
     For purpose of this subparagraph, the following provisions are
    applicable:  

                    A.   If the corporation shall issue or sell for
    cash Class A Common Stock, or any shares or obligations
    convertible into or exchangeable for Class A Common Stock, the
    consideration received by the corporation shall be deemed to be
    the amount of cash received, before deducting commissions or
    expenses paid by the corporation for any underwriting of, or
    otherwise in connection with, the issue or sale. If the
    corporation shall issue or sell any of those securities to an
    underwriter without payment of any commission, the consideration
    received by the corporation shall be deemed to be the full
    amount at which those securities are initially offered by the
    underwriter to the public, unless the difference between the
    price to the underwriter and the initial public offering price
    exceeds 15% of the price to the underwriter, in which case the
    consideration received by the corporation shall be deemed to be
    the price to the underwriter, plus 15% of the price to the
    underwriter.  

                    B.   If the corporation shall issue (otherwise
    than on conversion or exchange of obligations or shares of stock
    of the corporation) additional shares of Class A Common Stock
    for a consideration other than cash or a consideration partly
    other than cash, the amount of the consideration other than cash
    received by the corporation for those shares shall be deemed to
    be the value of the consideration as determined by the Board of
    Directors.  

                    C.   If the corporation shall issue additional
    Class A Common Stock, not exceeding in the aggregate 1,000,000
    shares of Class A Common Stock as presently constituted (subject
    to adjustment in case of a subdivision or combination of Class A
    Common Stock or of a dividend in Class A Common Stock declared
    on Class A Common Stock), pursuant to stock or option plans for
    officers or employees of the corporation, for a consideration
    per share (whether cash, other than cash, or partly other than
    cash) less than the conversion price in effect immediately prior
    to the date of issuance, the consideration per share received by
    the corporation for each of those shares shall be deemed to be
    the conversion price in effect immediately prior to its
    issuance.  

                    D.   If the corporation shall issue in any
    manner any rights to subscribe for or purchase Class A Common
    Stock or any options for the purchase of Class A Common Stock
    (other than the issuance referred to in clause (C) above), at a
    consideration per share (as computed below) less than the
    conversion price in effect immediately prior to the date of the
    offering of such rights or the granting of such options, as the
    case may be, all Class A Common Stock that the holders of those
    rights or options shall be entitled to subscribe for or purchase
    pursuant to those rights or options shall be deemed to have been
    issued or sold as of the date of the offering of those rights or
    the granting of those options, as the case may be, and the
    minimum aggregate consideration named in those rights or options
    for the Class A Common Stock covered thereby, plus the
    consideration, if any, actually received by the corporation (as
    of the date of the offering of those rights or the granting of
    those options, as the case may be) for the issuance of those 
    shares.

                    E.   If the corporation shall issue in any
    manner any obligations or any shares of the corporation (other
    than the Preferred shares) that shall be convertible into or
    exchangeable for Class A Common Stock, at a consideration per
    share (as computed below) less than the conversion price in
    effect immediately prior to the date those obligations or shares
    are issued, all Class A Common Stock issuable on the conversion
    or exchange of those obligations or shares shall be deemed to be
    issued as of the date those obligations or shares are issued,
    and the amount of consideration received by the corporation for
    those additional Class A Common Stock shall be deemed to be the
    total of (x) the amount of consideration received by the
    corporation on the issuance of those obligations or shares, as
    the case may be, plus (y) the minimum aggregate consideration,
    if any, other than for those obligations or shares, receivable
    by the corporation on that conversion or exchange, except in
    adjustment of interest and dividends.  

                    F.   The amount of the consideration received by
    the corporation on the issuance of any rights or options
    referred to in clause (D) above, or on the issuance of any
    obligations or shares that are convertible or exchangeable as
    described in clause (E) above, and the amount of the
    consideration, if any, other than those obligations or shares so
    convertible or exchangeable, receivable by the corporation on
    the exercise, conversion, or exchange thereof shall be
    determined in the same manner provided in clauses (A) and (B)
    above with respect to the consideration received by the
    corporation in case of the issuance of additional Class A Common
    Stock, provided, however, that if the obligations or shares of
    stock so convertible or exchangeable are issued in payment or
    satisfaction of any dividend on any stock of the corporation
    other than Class A Common Stock, the amount of the consideration
    received by the corporation on the original issuance of the
    obligations or shares so convertible or exchangeable shall be
    deemed to be the value of those obligations or shares, as of the
    date of the adoption of the resolution declaring the dividend,
    as determined by the Board of Directors at or as of that date.
    On the expiration of any rights or options referred to in clause
    (D), or the termination of any right of conversion or exchange
    referred to in clause (E), the conversion price then in effect
    shall be readjusted to the conversion price that would have been
    obtained had the adjustments made on the issuance of the option,
    right, or convertible or exchangeable securities been made on
    the basis of the delivery of only the number of Class A Common
    Stock actually delivered on the exercise of those rights or
    options or on the conversion or exchange of those securities.  

                    G.   If the corporation shall issue additional
    Class A Common Stock as a dividend, the aggregate number of
    Class A Common Stock issued in payment of the dividend shall be
    deemed to have been issued and to be outstanding on the day next
    succeeding the record date for the determination of shareholders
    entitled to the dividend and shall be deemed to have been issued
    without consideration.  
    
                    H.   The number of Class A Common Stock at any
    time outstanding shall include any Class A Common Stock then
    owned or held by or for the account of the corporation and any
    shares issuable in respect of scrip or warrants issued in lieu
    of fractional Class A Common Stock.  

                    I.   Each share of Class A Common Stock issued
    on conversion of Preferred shares shall be deemed to have been
    issued for a consideration equal to the conversion price in
    effect at the time of issuance.  

                    J.   If the corporation shall at any time
    subdivide or combine the outstanding Class A Common Stock, or
    shall issue as a dividend or dividends on the Class A Common
    Stock a number of Class A Common Stock equalling or aggregating
    10% or more of the number of Class A Common Stock outstanding at
    the close of business on September 30, 1998, or on the date of
    the next preceding adjustment pursuant to the provisions of this
    subparagraph, the amount of $.25 referred to in subparagraph (or
    the amount to which that amount may have previously been
    adjusted pursuant to the provisions of this clause (J)) shall be
    proportionately decreased in the case of subdivision or dividend
    payable in Class A Common Stock or increased in the case of
    combination, effective at the close of business on the date of
    that subdivision or combination or of the declaration of that
    dividend.  

                    K.   The term "dividend", as used in this
    subparagraph, means a dividend or other distribution on shares
    of the corporation. In the event of a declaration of a dividend
    by the corporation without fixing of a record date for the
    determination of shareholders entitled to that dividend, the
    date fixed by applicable law for the determination of the
    shareholders entitled to the dividend shall be deemed to be the
    record date.  

                    L.   If the corporation shall at any time
    subdivide the outstanding Class A Common Stock, or shall issue
    as a dividend on the Class A Common Stock equalling 10% or more
    of the number of Class A Common Stock outstanding immediately
    prior to that subdivision or issuance of dividend, the
    conversion price in effect immediately prior to that subdivision
    or the issuance of that dividend shall be proportionately
    decreased, and in case the corporation shall at any time combine
    the outstanding Class A Common Stock, the conversion price in
    effect immediately prior to that combination shall be
    proportionately increased, effective at the close of business on
    the date of the subdivision, dividend, or combination, as the
    case may be. For the purpose of this subparagraph, the date of
    issuance of any such dividend shall be determined in accordance
    with clause (K) of subparagraph.  

                    M.   No fractional Class A Common Stock shall be
    issued on the conversion of Preferred shares. If any fractional
    interest in a Common Share would, except for the provisions of
    this subparagraph, be deliverable on the conversion of any
    Preferred shares the corporation shall, in lieu of delivering
    the fractional share for that fractional interest, at its option
    either (i) adjust the fractional interest by payment to the
    holder of the converted Preferred shares in an amount in cash
    equal (computed to the nearest cent) to the current market value
    of the fractional interest, or (ii) issue nondividend-bearing
    and nonvoting scrip certificates for fractions of a share that
    would otherwise be issuable, in form and containing terms and
    conditions as may be determined by the Board of Directors, and
    exchangeable, within the period following the date of issue as
    the Board of Directors shall fix, together with other unexpired
    scrip certificates of like tenor aggregating one or more full
    shares, for share certificates representing the full share or
    shares.  
 
                    N.   Immediately on adjustment of the conversion
    price, the corporation shall maintain at its principal executive
    office and file with the transfer agent, if any, for Preferred
    shares a statement, signed by the Board Chairperson, or the
    President, or a Vice President of the corporation and by its
    chief financial officer or an Assistant Treasurer, showing in
    reasonable detail the facts requiring the adjustment and the
    conversion price after the adjustment. The transfer agent shall
    be under no duty or responsibility with respect to any such
    statement except to exhibit the statement from time to time to
    any holder of Preferred shares desiring an inspection.  

                    O.   On any capital reorganization or any
    reclassification of the capital stock of the corporation,
    consolidation or merger of the corporation with or into another
    corporation, or the conveyance of all of substantially all of
    the assets of the corporation to another corporation, each
    Preferred share shall thereafter be convertible into the number
    of shares or other securities or property to which a holder of
    the number of Class A Common Stock of the corporation
    deliverable on conversion of the Preferred share would have been
    entitled on the reorganization, reclassification, consolidation,
    merger or conveyance; and in any such case, appropriate
    adjustment (as determined by the Board of Directors) shall be
    made in the application of the provisions herein set forth with
    respect to the rights and interests thereafter of the holders of
    the Preferred shares, to the end that the provisions set forth
    (including provisions with respect to changes in, and other
    adjustments of, the conversion price) shall thereafter be
    applicable, as nearly as reasonably may be, in relation to any
    shares or other property thereafter deliverable on conversion of
    the Preferred shares.

                    P.   In the event that the corporation shall set
    a record date for the purpose of entitling the holders of its
    Class A Common Stock either to receive a dividend, or any other
    distribution, payable otherwise than in cash or to subscribe for
    or purchase any shares of any class or to receive any other
    rights, or in the event of any consolidation or merger of the
    corporation with or into another corporation, capital
    reorganization of the corporation, reclassification of the
    corporation's shares (other than a subdivision or combination of
    its outstanding Class A Common Stock), or conveyance of all or
    substantially all of the corporation's assets to another
    corporation, or in the event of the voluntary or involuntary
    dissolution, liquidation, or winding up of the corporation,
    then, and in any such case, the corporation shall cause a notice
    described below to be mailed to the holders of record of the
    outstanding Preferred shares. The notice shall state the date
    that has been set as the record date for the purpose of
    dividend, distribution, or rights, or on which the
    reclassification, reorganization, consolidation, merger,
    conveyance, dissolution, liquidation, or winding up is to take
    place and the record date as of which holders of Class A Common
    Stock of record shall be entitled to exchange their Class A
    Common Stock for securities or other property deliverable on
    reclassification, reorganization, consolidation, merger,
    conveyance, dissolution, liquidation, or winding up. The notice
    shall be mailed at least ten days prior to the date specified in
    the notice, as determined pursuant to the provisions of the
    preceding sentence.  

                    Q.   The corporation shall at all times reserve
    and keep available, out of its authorized but unissued Class A
    Common Stock, solely for the purpose of effecting conversion of
    the Preferred shares, the full number of Class A Common Stock
    deliverable on conversion of all Preferred shares from time to
    time outstanding. The corporation shall from time to time, in
    accordance with California law, increase the authorized amount
    of its Class A Common Stock if at any time the authorized number
    of Class A Common Stock remaining unissued shall not be
    sufficient to permit the conversion of all the Preferred at the
    time outstanding. 

                    R.   The corporation shall pay any and all issue
    and other taxes that may be payable in respect of any issue or
    delivery of Class A Common Stock on conversion of preferred
    shares pursuant hereto. The corporation shall not, however, be
    required to pay any tax that may be payable in respect of any
    transfer involved in the issue and delivery of Class A Common
    Stock in a name other than that in which the Preferred shares so
    converted were registered, and no such issue or delivery shall
    be made unless and until the person requesting that issue has
    paid to the corporation the amount of any such tax, or has
    established, to the satisfaction of the corporation, that such
    tax has been paid.  

                    S.   Whenever any reference is made in these
    provisions to the issue or sale of Common Stock, the term
    "Common Stock" shall include any stock of any class of the
    corporation other than Preferred shares with a fixed limit on
    dividends and a fixed amount payable in the event of any
    voluntary or involuntary liquidation, dissolution, or winding up
    of the corporation.  

                    T.   All certificates evidencing Preferred
    shares surrendered for conversion shall be appropriately
    cancelled on the books of the corporation, and the shares so
    converted represented by those certificates shall be restored to
    the status of authorized but unissued Preferred shares of the
    corporation.   

          (4)  As used herein, the term "Bid Price" (which shall be
    subject to adjustment in the event of any stock split, dividend
    or distribution, reverse stock split or other similar event)
    shall mean:

               i)   if the principal market for the Class A Common
    Stock is a national securities exchange or the National
    Association of Securities Dealers Automated Quotation Systems
    ("NASDAQ") National Market System, the closing sales price of
    the Common Stock as reported by such exchange or market system,
    or on a consolidated tape reflecting transactions on such
    exchange or market system; or

               ii)  if the principal market for the Class A Common
    Stock is not a national securities exchange or the NASDAQ
    National Market System and the Class A Common Stock is quoted on
    NASDAQ, the closing bid price of the Class A Common Stock as
    quoted on NASDAQ; or

               iii) if the principal market for the Class A Common
    Stock is not a national securities exchange or the NASDAQ
    National Market System and the Class A Common Stock is not
    quoted on NASDAQ, the closing bid for the Class A Common Stock
    as reported by the National Quotation Bureau, Inc. ("NQB") or at
    least one market maker in the Class A Common Stock if quotations
    are not available from NQB but are available from a market maker.

    RESOLVED FURTHER, that the Board Chairperson, the President or
    any Vice President, and the Secretary, the Chief Financial
    Officer, the Treasurer, or any Assistant Secretary or Assistant
    Treasurer of this corporation are each authorized to execute,
    verify, and file in the office of the California Secretary of
    State a Certificate of Determination in accordance with this
    resolution and California law.  

     4.   We further declare under penalty of perjury under the laws
of the State of California that the matters set forth in this
Certificate are true and correct of our own knowledge.  
 
     Executed on August 14, 1998, at Hayward, California.


                         /s/ Vinit Saxena
                         Vinit Saxena, President


                         /s/ Armin Ramel
                         Armin Ramel, Secretary