<PAGE>

                         AVIC GROUP INTERNATIONAL, INC.


             Certificate of Designations of Preferences of Series C
          Convertible Preferred Stock of Avic Group International, Inc.

         Joseph R. Wright and Timothy P.F. Crowley hereby certify that:

     (1)  They are the President and Secretary, respectively of Avic Group
International, Inc., a Delaware corporation (the "Corporation").

     (2)  Pursuant to the authority granted under the Corporation's Certificate
of Incorporation, the Board of Directors of said Corporation has duly adopted
the following recitals and resolutions:

          WHEREAS, this Corporation is authorized by its Certificate of
     Incorporation to issue Ten Million (10,000,000) shares of Preferred Stock
     (the "Preferred Stock"); and

          WHEREAS, the Board of Directors of this Corporation is authorized, as
     to the Preferred Stock, within the limitations and restrictions stated in
     the Certificate of Incorporation, to fix by resolution or resolutions the
     designation of each Series of Preferred Stock and the powers, preferences
     and relative participating, optional or other special rights and
     qualifications, limitations or restrictions thereof, including, without
     limitation, such provisions as may be desired concerning dividends,
     redemption, voting, dissolution or the distribution of assets, conversion
     or exchange, and such other subjects or matters as may be fixed by
     resolution or resolutions of the Board of Directors; and

          WHEREAS, 1,524,328 shares of such Preferred Stock are issued and
     outstanding and the Board of Directors of this Corporation desires,
     Pursuant to its authority granted under the Certificate of Incorporation,
     to determine and fix the rights, preferences, privileges and restrictions
     relating to a Series C of said Preferred Stock, and to fix the number of
     shares constituting and the designation of such Series;

     NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized a Series C
of Preferred Stock on the terms and with the provisions herein set forth:


<PAGE>

                                       -2-

     1.   DEFINITIONS.  For purposes hereof the following Definitions shall
apply:

     "AVERAGE STOCK PRICE" shall mean the lowest Market Price for Shares of
Common Stock during the thirty (30) business days immediately preceding each
Holder Conversion Date.

     "BOARD" shall mean the Board of Directors of the Company.

     "CLOSING DATE" shall mean the date of original issuance of the Series C
Preferred Stock.

     "COMMON STOCK" shall mean the Common Stock, $0.001 par value of the
Company.

     "COMPANY" shall mean this corporation.

     "CONVERSION DATE MARKET PRICE" shall mean an amount that is equal to the
Average Stock Price, subject however to adjustment as provided in Section 7 and
8 of this Certificate of Designations and in Section 7 of the Registration
Rights Agreement executed by the Company in favor of the holders of the Series C
Preferred Stock as of the date of issuance of the Series C Preferred Stock,
which provisions are hereafter incorporated herein.

     "CONVERSION DEFAULT" shall have the meaning set forth in Paragraph 10(b).

     "CONVERSION NOTICE" shall have the meaning set forth in Paragraph 7(c).

     "CONVERSION RATE" shall have the meaning set forth in Paragraph 7(b).

     "DESIGNATED PRICE" shall mean $10,000 per share plus all accrued and unpaid
dividends.

     "HOLDER CONVERSION DATE" shall have the meaning set forth in Paragraph
7(c).

     "JUNIOR STOCK" shall mean the Common Stock and all other shares of the
Company's capital stock, whether presently outstanding or hereafter issued,
other than the Series A, Series C, and Series D Preferred Stock;


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                                       -3-

PROVIDED, HOWEVER, the Company may from time to time, without the consent of the
holders of the outstanding shares of the Series C Preferred Stock, issue
additional series of its presently authorized and unissued Preferred Stock which
rank pari passu to or do not have preference over the Series C Preferred Stock
in dividends, distribution upon liquidation or other respects.

     "MARKET PRICE FOR SHARES OF COMMON STOCK" shall mean the price of one share
of Common Stock determined as follows:

     (i)       If the Common Stock is listed on NASDAQ, the daily low trading
price on the date of valuation;

     (ii)      If the Common Stock is listed on a national securities exchange,
the daily low trading price on the date of valuation;

     (iii)     If neither (i) or (ii) apply but the Common Stock is quoted in
the over-the-counter market on the pink sheets or bulletin board, the lowest
"bid" price thereof on the date of valuation; and

     (iv)      If neither clause (i), (ii) or (iii) above applies, the market
value as determined by a nationally recognized investment banking firm or other
nationally recognized financial advisor retained by the Company for such
purpose, taking into consideration, among other factors, the earnings history
book value and prospects for the Company, and the prices at which shares of
Common Stock recently have been traded.  Such determination shall be conclusive
and binding on all persons.

     "PARAGRAPH 5 TRANSACTION" shall mean a merger, consolidation or other
transaction referred to in Paragraph 5.

     "SERIES C PREFERRED STOCK" shall mean the Series C Convertible Preferred
Stock of the Company $0.001 par value.

     2.   DESIGNATION AND NUMBER.  The designation of the shares of Preferred
Stock authorized by these resolutions shall be "Series C Convertible Preferred
Stock" (the "Series C Preferred Stock").  The authorized number of shares
constituting the Series C Preferred Stock shall be 250 shares and each share of
Series C Preferred Stock shall rank equally in all respects.

     3.   DIVIDENDS. The holders of the then outstanding Series C Preferred
Stock shall be entitled to receive cumulative dividends at the annual rate of 8%
per annum per share, payable quarterly (i) in shares of 



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                                       -4-

Common Stock at the time of Conversion (as provided in Paragraph 7 hereof) or
(ii) in cash in connection with any payment pursuant to Paragraph 10(b). 
Dividends on the Series C Preferred Stock shall accumulate and accrue from the
date of its original issue and shall accrue from day to day thereafter, whether
or not earned or declared.  The Series C Preferred Stock shall participate on an
"as converted basis" in cash dividends paid on Junior Stock and in other
dividends on Common Stock as provided in Section 8(b) below.

     4.   LIQUIDATION RIGHTS OF SERIES C PREFERRED STOCK.

     (a)  PREFERENCE.  In the event of any liquidation, dissolution or winding
up of the Company, whether voluntary or involuntary, or a sale or other
disposition of all or substantially all of the assets of the Company which shall
be deemed to be a liquidation, dissolution or winding up of the Company, the
holders of the Series C Preferred Stock then outstanding shall be pari passu
with the holders of Series D Preferred Stock and shall be entitled to be paid
out of the assets of the Company available for distribution to its stockholders,
whether such assets are capital, surplus, or earnings, before any payment or
declaration and setting apart for payment of any amount shall be made in respect
of any Junior Stock, an amount equal to the Designated Price, and no more.  If
upon any actual or deemed liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the assets to be distributed to the holders of
the Series C Preferred Stock shall be insufficient to permit the payment to such
stockholders of the full preferential amounts aforesaid, then all of the assets
of the Company to be distributed shall be distributed ratably to the holders of
the Series C Preferred Stock and to any holders of any series of Preferred Stock
that ranks PARI PASSU with the Series C Preferred Stock (including Series D
Preferred Stock), on the basis of the number of shares of Preferred Stock held. 
The Company shall promptly mail written notice of such liquidation, dissolution
or winding up (with a copy sent by facsimile), but in any event such notice
shall not be given less than thirty (30) days prior to the effective date stated
therein to each record holder of the Series C Preferred Stock.  If the Company
determines to effect a liquidation, dissolution or winding up of the Company,
then, notwithstanding the limitations set forth in Paragraph 7, the Series C
Preferred Stock shall thereupon, at the option of a holder thereof, be
convertible in full. 
     
     (b)  REMAINING ASSETS.  After the payment or distribution to the holders of
the Series C Preferred Stock of the full preferential amounts aforesaid, the
holders of the Junior Stock then outstanding shall be entitled to receive all
remaining assets of the Company to be distributed.


<PAGE>

                                       -5-

     5.   MERGER, CONSOLIDATION.  If at any time there occurs any consolidation
or merger of the Company with or into any other corporation or other entity or
person (whether or not the Company is the surviving corporation), or any other
corporate reorganization or transaction or series of related transactions in
which in excess of 50% of the Company's voting power is transferred (a
"Paragraph 5 Transaction"), the holders of the Series C Preferred Stock then
outstanding shall have the right in their sole discretion to participate in any
such transaction as a class with common stockholders on the same basis as if the
Preferred Stock had been converted one day prior to the record date or effective
date of such transactions, as applicable.

     6.   VOTING RIGHTS.  The holders of the Series C Preferred Stock will not
have any voting rights except as set forth below or as otherwise from time to
time required by law.

     The affirmative approval (by vote or written consent as permitted by
applicable law) of the holders of at least 66 2/3% of the outstanding shares of
the Series C Preferred Stock, voting separately as a class, will be required for
(i) any amendment, alteration or repeal of the Company's Restated Certificate of
Incorporation (including any Certificate of Designations, Rights and
Preferences) if the amendment, alteration or repeal adversely affects the
powers, preferences or rights of the Series C Preferred Stock (including,
without limitation, by creating any class or series of equity securities having
a preference over the Series C Preferred Stock with respect to dividends,
distribution upon liquidation or in any other respect, but excluding the
issuance, of a series of Preferred Stock that ranks PARI PASSU with the Series C
Preferred Stock), or (ii) any amendment to or waiver of the terms of the Series
C Preferred Stock or this Certificate.

          To the extent that under Delaware law the approval of the holders of
the Series C Preferred Stock, voting separately as a class, is required to
authorize a given action of the Company, the affirmative approval (by vote or
written consent as permitted by applicable law) of the holders of a majority of
the outstanding shares of the Series C Preferred Stock shall constitute the
approval of such action by the class.  To the extent that under Delaware law the
holders of the Series C Preferred Stock are entitled to vote on a matter with
holders of the Common Stock, voting together as one class, each share of Series
C Preferred Stock shall be entitled to that number of votes as shall be equal to
the number of shares of Common Stock into which such shares of Series C
Preferred Stock could have been converted on the record date for any meeting of
stockholders or 


<PAGE>

                                       -6-

on the date of any written consent of stockholders as applicable.  Holders of
the Series C Preferred Stock shall be entitled to notice of all shareholder
meetings or written consents (whether or not they are entitled to vote thereat),
which notice will be provided pursuant to the Company's by-laws and applicable
statutes.

     7.   CONVERSION.  The holders of Series C Preferred Stock shall have the
following conversion rights.

     (a)  HOLDER'S RIGHT TO CONVERT.  Each share of Series C Preferred Stock
shall be convertible, at the option of the holder thereof, into fully paid and
nonassessable shares of Common Stock.

     (b)  CONVERSION PRICE FOR HOLDER CONVERTED SHARES.  Each share of the
Series C Preferred Stock, valued at the Designated Price, that is converted into
shares of Common Stock at the option of the holder shall be convertible into the
number of shares of Common Stock which may be purchased at the Conversion Date
Market Price.

     The number of shares of Common Stock into which each share of Series C
Preferred Stock may be converted pursuant to this paragraph hereof is hereafter
referred to as the "Conversion Rate" for such Series C Preferred Stock.

     (c)  MECHANICS OF CONVERSION.  In order to convert any or all shares of
Series C Preferred Stock into full shares of Common Stock, the holder shall
surrender the certificate or certificates therefor, duly endorsed, by either
overnight courier or 2-day courier, to the principal office of the Company or of
any transfer agent for the Series C Preferred Stock, and shall give written
notice (the "Conversion Notice") together with the holder's calculation of the
Conversion Rate by facsimile (with the original of such notice forwarded with
the foregoing courier) to the Company at such office that he elects to convert
the number of shares (specified therein, which such notice and election shall be
irrevocable by the holder; PROVIDED, HOWEVER, that the Company shall not be
obligated to issue certificates evidencing the shares of the Common Stock
issuable upon such conversion unless either the certificates evidencing the
shares of Series C Preferred Stock are delivered to the Company or its transfer
Agent as provided above, or the holder notifies the Company that such
certificates have been lost, stolen or destroyed and promptly executes an
agreement reasonably satisfactory to the Company to indemnify the Company from
any loss incurred by it in connection with the loss of such certificates.


<PAGE>

                                       -7-

     Immediately on receipt of the Conversion Notice, the Company shall verify
the holder's calculation of the Conversion Rate as calculated by the holder or,
if the Company disagrees with the holder's calculation of the Conversion Rate,
deliver the Company's calculation of the Conversion Rate to the holder.  If the
holder and the Company cannot agree on the Conversion Rate within two (2)
business days, the Company shall, without delay, issue a certificate or
certificates for the number of shares of Common Stock to which the holder is
entitled according to the Company's calculation of the Conversion Rate and in
accordance with the procedures set forth in this subparagraph (c).  The
disagreement as to the Conversion Rate shall be submitted to a single arbitrator
agreeable to the Company and the holder within five (5) business days and shall
be decided by said arbitrator within two (2) business days of submission of the
dispute to such arbitrator.  The decision of the arbitrator shall be conclusive
on the Company and the holder.  If there is no dispute with respect to the
Conversion Rate, the Company shall use its best efforts to issue and deliver
within three (3) business days after delivery to the Company of the Conversion
Notice, to such holder of Series C Preferred Stock at the address of the holder
on the stock books of the Company, or to its designee, a certificate or
certificates for the number of shares of Common Stock to which he shall be
entitled as aforesaid, together with a certificate or certificates for the
number of Series C Preferred Stock not submitted for conversion.  The date on
which the Conversion Notice is given (the "Holder Conversion Date") shall be
deemed to be the date the Company received by facsimile the Conversion Notice,
provided that the original shares of Series C Preferred Stock to be converted,
or the aforesaid notice of lost, stolen or destroyed certificates, are received
by the Company or any transfer agent for the Series C Preferred Stock within
five business days thereafter, and the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock on such
date.  If the original certificates or the aforesaid notice of lost, stolen or
destroyed certificates, are not received by the Company or any transfer agent
for the Series C Preferred Stock within five business days after the Holder
Conversion Date, the Conversion Notice shall become null and void.

     (d)  ADDITIONAL SHARES OF COMMON STOCK.  If the Conversion Date Market
Price on a Holder Conversion Date shall be $5.00 (the "Minimum Additional Share
Price"), as the Minimum Additional Share Price may be adjusted as hereinafter
provided, or more, then, in addition to and not in lieu of the shares of Common
Stock issuable by reason of the conversion notice given on such Conversion Date,
the Company shall issue and sell to the Holder giving such conversion notice and
such Holder shall purchase 


<PAGE>

                                       -8-

from the Company, at a price per share equal to such Conversion Date Market
Price on such Conversion Date, one (1) share of Common Stock (each an
"Additional Share" and, collectively with all such other shares so purchased and
sold hereunder, "Additional Shares") for each share of Common Stock issuable to
such Holder by reason of such conversion of Series C Preferred Stock pursuant to
such conversion notice.  If the Conversion Date Market Price on a Holder
Conversion Date shall be less than the Minimum Additional Share Price, upon the
conversion of shares of Series C Preferred Stock on such Holder Conversion Date,
any rights to purchase Additional Shares with respect to such shares of Series C
Preferred Stock so converted on such Holder Conversion Date shall terminate. 
The total price for such Additional Shares so to be purchased and sold incident
to such a conversion notice shall be paid by such Holder upon issuance of the
certificate or certificates therefor pursuant to subparagraph 7(c) hereof by
wire transfer of immediately available federal funds to such account as the
Company shall specify in writing to such Holder following receipt by the Company
of such conversion notice.  The Minimum Additional Share Price shall be
appropriately adjusted upon any stock dividend, stock split, combination,
recapitalization, or other reorganization affecting the Common Stock
outstanding.

     (e)  In the event the Company issues or sells any shares of its Common
Stock or any of its securities which are convertible into or exchangeable for
its Common Stock or any convertible security, or any warrants or other rights
subscribed for or to purchase any options for the purchase of its Common Stock
or other securities in a transaction other than a Qualified Transaction (as
hereinafter defined), then the Minimum Additional Share Price for any remaining
and unconverted shares of Series C Preferred Stock shall be adjusted, at the
sole option of the Subscriber, to the closing market price of the Company's
Common Stock on the date of such transaction.  Qualified Transactions are
defined as the following: any of (i) the issuance of Equity Securities which
result in the issuance of the Company's Common Stock at an effective purchase
price greater than or equal to $5.00 per share, (ii) shares or options issued or
which may be issued pursuant to the Company's employee or director option plans
or otherwise issued as compensation to employees or directors, or shares issued
upon exercise of options, warrants, or rights outstanding on the Closing date
listed in the Exchange Act Reports, (iii) any public offering of the Company's
securities underwritten by one of the following underwriters which, together
with their affiliates, are generally known as: Goldman Sachs, Merrill Lynch,
Morgan Stanley, Credit Suisse First Boston, Lehman Brothers, Salomon Brothers,
Bear Stearns, J.P. Morgan, Donaldson, Lufkin & Jenrette, or Smith Barney, or
(iv) Equity Securities issued whose shares or underlying shares of Common Stock
are 



<PAGE>

                                       -9-

restricted from resale on any national market system or any public stock market
before March 1,1998.

     (f)  MANDATORY CONVERSION.  On the third anniversary of the first date on
which the Company issues any shares of Series C Convertible Preferred Stock,
each outstanding share of Series C Convertible Preferred Stock shall be
converted automatically and without further action into fully paid and
nonassessable shares of Common Stock (as such shares of Common Stock may be
constituted on the Holder Conversion Date) at the rate specified in Section 7(b)
hereof, subject to adjustment in accordance with Section 8 hereof, and a
Conversion Notice shall be deemed to have been given by the holder of each such
outstanding share of Series C Convertible Preferred Stock on such date.

     8.   ADJUSTMENTS; REORGANIZATIONS.

     (a)  ADJUSTMENTS FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION.  In the
event that at any time or from time to time after the Closing Date, the Common
Stock issuable upon the conversion of the Series C Preferred Stock is changed
into the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or reorganization
provided for elsewhere in this Paragraph 8 or a merger or consolidation,
provided for in Paragraph 5), then and in each such event each holder of Series
C Preferred Stock shall have the right thereafter to convert such stock into the
kind of stock receivable upon such recapitalization, reclassification or other
change by Holders of shares of Common Stock, all subject to further adjustment
as provided herein.  In such event, the formulae set forth herein for conversion
and redemption shall be equitably adjusted to reflect such change in number of
shares or, if shares of a class of stock are issued to reflect the market price
of the class or classes of stock (applying the same factors used in determining
the Market Price for Shares of Common Stock) issued in connection with the above
described transaction.

     (b)  ADJUSTMENTS FOR STOCK SPLITS, COMBINATIONS, DIVIDENDS, DISTRIBUTIONS
OR REORGANIZATION.  If at any time or from time to time after the Closing Date,
the Company (i) effects a subdivision of the outstanding Common Stock, (ii)
combines the outstanding shares of Common Stock into a smaller number of shares
(i.e., by reverse stock split or otherwise), (iii) makes or fixes a record date
for the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock, (iv) makes
or fixes a record date for the determination of holders of Common Stock entitled
to receive a 


<PAGE>

                                      -10-

dividend or other distribution payable in securities of the Company other than
shares of Common Stock, or (v) there is a capital reorganization of the Common
Stock (other than as set forth in (i)-(iv), above) then, as a part of such
dividend or distribution, provision shall be made so that the holders of the
Series C Preferred Stock shall thereafter be entitled (A) to receive when paid
to other holders of Common Stock, on an "as converted" basis, the number of
shares of stock (other than Common Stock) or other securities or property to
which a holder of the number of shares of Common Stock deliverable would have
been entitled on such event and (B) to receive, to the extent that the dividend
or distribution is made within thirty days prior to a conversion event, payable
in Common Stock, upon conversion of the Series C Preferred Stock, that number of
shares of additional Common Stock to which they would have been entitled if they
were holding Common Stock  on the relevant date.  In any such case, appropriate
adjustment shall be made in the application of the provisions of this Paragraph
8 with respect to the rights of the holders of the Series C Preferred Stock
after such event to the end that the provisions of this Paragraph 8 shall be
applicable after that event and be as nearly equivalent as may be practicable,
including, by way of illustration and not limitation, by equitably adjusting the
formulae set forth herein for conversion and redemption to reflect the market
price of the securities or property (applying the same factors used in
determining the Market Price for Shares of Common Stock) issued in connection
with the above described transaction.

     (c)  CONVERSION DATE MARKET PRICE ADJUSTMENT. In the event that the Company
issues or sells any shares of its Common Stock or any of its securities which
are convertible into or exchangeable for its Common Stock or any convertible
security, or any warrants or other rights subscribed for or to purchase any
options for the purchase of its Common Stock or other securities (other than
shares or options issued or which may be issued pursuant to the Company's
employee or director option plans or otherwise issued as compensation to
employees or directors, or shares issued upon exercise of options, warrants or
rights outstanding on the Closing Date listed in the Exchange Act Reports or
shares or options issued in consideration for business acquisitions or
combinations made by the Company) (the "Equity Securities") at an effective
purchase price per share of Common Stock which is less than $5.00, then at the
time the Series C Preferred Stock is submitted for conversion, upon such
conversion, the Company shall issue to the Holder or any assignee of Holder's
rights hereunder such number of shares of Common Stock as will cause the
effective Conversion Date Market Price of such shares of Common Stock to be
equal to the lesser of (i) the Average Stock Price or (ii) the effective
issuance price at which such Equity Securities are issued.


<PAGE>

                                      -11-

     9.   FRACTIONAL SHARES.  No fractional shares of Common Stock or scrip
representing fractional shares of Common Stock shall be issuable hereunder.  The
number of shares of Common Stock that are issuable upon any conversion shall be
rounded up or down to the nearest whole share.
          
     10.  RESERVATION OF STOCK ISSUABLE UPON CONVERSION.

     (a)  RESERVATION REQUIREMENT.  The Company has reserved and the Company
shall continue to reserve and keep available at all times, free of preemptive
rights, shares of Common Stock for the purpose of enabling the Company to
satisfy any obligation to issue shares of its Common Stock upon conversion of
the Series C Preferred Stock provided, however, that the number of shares so
reserved shall at all times be at least equal to 150% of the number of shares
necessary for the Company to satisfy any obligation to issue shares of its
Common Stock (and Additional Shares, if any) incident to the conversion of
Series C Preferred Stock.  The number of shares so reserved may be reduced by
the number of shares actually delivered pursuant to conversion of Series C
Preferred Stock; provided that in no event shall the number of shares so
reserved be less than 150% of the number of shares required to satisfy remaining
conversion rights on the unconverted Series C Preferred Stock and the number of
shares so reserved shall be increased to reflect stock splits and stock
dividends and distributions.
     
     (b)  DEFAULT.  If the Company does not have a sufficient number of shares
of Common Stock available to satisfy the Company's obligations to a holder of
Series C Preferred Stock upon receipt of a Conversion Notice, or otherwise fails
or refuses to perfect conversion of any Series C Preferred Stock, with respect
to the Series C Preferred Stock as to which conversion is not perfected by the
Company through the delivery of certificates representing the shares of Common
Stock issuable upon such conversion (including Additional Shares, if any) (a
"Conversion Default") the holder of the Series C Preferred Stock shall have the
right to put the Preferred Stock to the Company at a price which shall be equal
to 125% of the Designated Price.

     11.  NO REISSUANCE OF SERIES C PREFERRED STOCK.  No share or shares of
Series C Preferred Stock acquired by the Company by reason of redemption,
purchase, conversion or otherwise shall be reissued as Series C Preferred Stock,
and all such shares shall be retired and shall return to the status of
authorized, unissued and retired and undesignated shares of Preferred Stock.  No
additional shares of Series C Preferred Stock shall be 


<PAGE>

                                      -12-

authorized or issued without the consent of at least 66 2/3% in interest of the
holders of Series C Preferred Stock outstanding immediately prior thereto.

     12.  NO IMPAIRMENT.  The Company shall not intentionally take any action
which would impair the rights and privileges of the shares of Series C Preferred
Stock set forth herein.

     13.  HOLDER'S RIGHTS IF SHARES ARE DELISTED OR IF TRADING IN COMMON STOCK
IS SUSPENDED.  In the event that at any time on or after the date hereof and
prior to the third anniversary of the Closing Date, trading in the shares of the
Company's Common Stock is suspended on the principal market or exchange for such
shares (including the NASDAQ Stock Market), for a period of five consecutive
trading days, other than as a result of the suspension of trading in securities
in general, or if such shares are delisted, then, at holder's option, the
Company shall redeem such holder's shares of Series C Preferred Stock at a
redemption date designated by such holder and at the price which is the greater
of (a) the product of the Conversion Rate and the Closing Market Price of the
Company's Common Stock on the date of Redemption Notice and (b) 125% of the
Designated Price of the Preferred Stock.

     14.  LIMITATIONS ON HOLDER'S RIGHT TO CONVERT.  
     
     Holders of Series C Preferred Stock may not convert any of the Series C
Preferred Stock within the first 60 calendar days following the date of issuance
of the Series C Preferred Stock.  Thereafter, Holders of Series C Preferred
Stock may convert the Series C Preferred Stock as follows:

            Calendar Days from Issuance       Shares Convertible

                        61                             60
                        91                            120
                       121                            180
                       151                            250

     Notwithstanding anything to the contrary contained herein, each Conversion
Notice shall contain a representation that the number of shares of the Company's
Common Stock that the holder is then entitled to receive upon the conversion of
such number of Shares of Series C Preferred Stock as is then being submitted for
conversion, together with any other shares of Common Stock 


<PAGE>

                                      -13-

deemed beneficially owned by such holder, together with all shares of the
Company's Common Stock deemed beneficially owned by the holder's "affiliates" as
defined in Rule 144 of the Act will not exceed 4.9% of the total issued and
outstanding shares of the Company's Common Stock, after giving effect to the
shares of Common Stock to be issued pursuant to such conversion notice.

     15.  The authorized number of shares of Preferred Stock of this Corporation
is 10,000,000 shares and the number of shares constituting the Series C
Convertible Preferred Stock, none of which has been issued, is 250 shares.


<PAGE>

                                      -14-


          IN WITNESS WHEREOF the undersigned have executed this Certificate of
     Designations of Preferences at the City of New York, State of New York, on
     this 12th day of June, 1997.

                                             /s/ Joseph R. Wright
                                             ---------------------------------
                                             Joseph R. Wright, President


                                             /s/ Timothy P.F. Crowley
                                             ---------------------------------
                                             Timothy P.F. Crowley, Secretary


          The undersigned declare under the penalty of perjury that the matters
     set forth in the foregoing Certificate are true of their own knowledge. 
     Executed at New York, New York, on the 12th day of June, 1997.


                                             /s/ Joseph R. Wright
                                             ---------------------------------
                                             Joseph R. Wright, President


                                             /s/ Timothy P.F. Crowley
                                             ---------------------------------
                                             Timothy P.F. Crowley, Secretary