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                                                                     Exhibit 4.1


                            RSL COMMUNICATIONS, LTD.


                    CERTIFICATE OF DESIGNATION OF THE POWERS,
                PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
             AND OTHER SPECIAL RIGHTS OF 7-1/2% SERIES A CONVERTIBLE
              PREFERRED SHARES AND QUALIFICATIONS, LIMITATIONS AND
                              RESTRICTIONS THEREOF

                  RSL Communications, Ltd., an exempted company organized under
the laws of Bermuda (the "Issuer"), certifies that pursuant to the authority
contained in its Memorandum of Association (the "Memorandum of Association") and
its Bye-Laws (the "Bye-Laws"), and in accordance with Bermuda law, the Board of
Directors (or a duly authorized committee thereof) of the Issuer on February 10,
2000, and February 14, 2000 duly approved and adopted the following resolution,
which resolution remains in full force and effect on the date hereof:

                  RESOLVED, on this 14th day of February, 2000, that pursuant to
the authority vested in the Board of Directors by the Memorandum of Association
and Bye-Laws, the Board of Directors does hereby designate, create, authorize
and provide for the issue of a series of preferred shares having the following
designation, voting powers, preferences and relative, participating, optional
and other special rights:

                  Certain capitalized terms used herein are defined in Section
16.

                  1. Number and Designation. The Issuer shall have a class of
preferred shares, which shall be designated as its 7 1/2% Series A Convertible
Preferred Shares (the "Series A Preferred Shares"), par value U.S. $0.00457 per
share, with 7,000,000 shares initially authorized and, subject to the
limitations set forth herein, such number of additional shares as are authorized
from time to time by resolution of the Board of Directors of the Issuer and as
set forth in the Bye-Laws of the Issuer. Unless otherwise specified, references
herein to any "Section" refer to the Section number specified in this
Certificate of Designation (this "Certificate").

                  2. Issuance; Registered Form; Registrar. The Issuer may issue
Series A Preferred Shares from time to time up to the aggregate number of shares
at the time authorized to be outstanding by action of the Board of Directors (or
any committee thereof) of the Issuer. Certificates for Series A Preferred Shares
shall be issuable only in registered form. The Issuer hereby appoints American
Stock



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Transfer & Trust Company as its initial Registrar and Transfer Agent (the
"Transfer Agent") for the Series A Preferred Shares.

                  3. Liquidation Preference. Upon any liquidation, winding up or
dissolution of the Issuer, each Series A Preferred Share shall be entitled to a
liquidation preference of U.S.$50 per share (the "liquidation preference") plus,
without duplication, an amount equal to all accrued and unpaid dividends
("Accumulated Dividends"). Such amount shall be payable as and to the extent
provided in Section 9.

                  4. Registration Under Securities Act; Transfer. (a) The Series
A Preferred Shares have not been registered under the United States Securities
Act of 1933 (the "Securities Act") and may not be resold, pledged or otherwise
transferred prior to the date when they no longer constitute "restricted
securities" for purposes of Rule 144 under the Securities Act other than (i) to
"qualified institutional buyers" ("QIBs") pursuant to and in compliance with
Rule 144A ("Rule 144A") under the Securities Act, (ii) to institutional
"accredited investors" as defined in Rule 501(a) under the Securities Act, (iii)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 thereunder (if available), or (iv) pursuant to an effective
registration statement under the Securities Act, in each case in accordance with
any applicable securities laws of the states of the United States and other
jurisdictions. Until such time as determined by the Issuer and the Registrar,
certificates evidencing the Series A Preferred Shares shall contain a legend
(the "Restricted Shares Legend") evidencing the foregoing restrictions in
substantially the form set forth on the form of Series A Preferred Share
attached hereto as Exhibit A.

                  (b) Series A Preferred Shares will initially be represented by
one or more global certificates with the global legend (the "Global Shares
Legend") and the Restricted Shares Legend (each, a "Global Certificate") each as
set forth on the form of Series A Preferred Share attached hereto as Exhibit A
which will be deposited with, or on behalf of, the Depository Trust Company
("DTC" or the "Depositary") and registered in the name of Cede & Co., as nominee
of DTC (the "Global Certificate Holder"). Except as set forth below, record
ownership of the Global Certificate may be transferred, in whole or in part,
only to another nominee of DTC or to a successor of DTC or its nominee.



                                       2
<PAGE>



                  (c) Owners of a beneficial interest in the Global Certificate
may hold their interest in the Global Certificate directly through DTC if such
holder is a participant in DTC (a "Participant") or indirectly through
organizations that are Participants. Persons who are not Participants may
beneficially own interests in the Global Certificate held by DTC only through
Participants or certain banks, brokers, dealers, trust companies and other
parties that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly.

                  (d) Global Certificates are exchangeable for certificates in
definitive form (the "Definitive Securities") of like tenor as such Global
Certificates if DTC notifies the Issuer that it is unwilling or unable to
continue as depositary for the Global Certificates or ceases to be a clearing
agency under the United States Securities Exchange Act of 1934 (the "Exchange
Act") and, in either case, a successor depositary registered as a clearing
agency under the Exchange Act is not appointed by the Issuer within 90 days or
at any time if the Issuer determines not to have all of the Series A Preferred
Shares represented by Global Certificates. Any Definitive Securities that are
issued in exchange for Global Certificates will be issued in authorized
denominations and will be registered in such names as DTC shall direct. Subject
to the foregoing, Global Certificates are not exchangeable, except for Global
Certificates of the same aggregate denomination to be registered in the name of
DTC or its nominee or in the name of a successor of DTC or its nominee. In
addition, such certificates will bear the Restricted Shares Legend (unless the
Issuer determines otherwise in accordance with applicable law) subject, with
respect to such Series A Preferred Shares, to the provisions of such legend.

                  (e) No certificate evidencing Series A Preferred Shares shall
be valid unless it bears the countersignature of the Transfer Agent.

                  5. Paying Agent and Conversion Agent; Transfer Restrictions.
(a) The Issuer shall maintain in the Borough of Manhattan, City of New York,
State of New York (i) an office or agency where Series A Preferred Shares may be
presented for payment (the "Paying Agent") and (ii) an office or agency where
Series A Preferred Shares may be presented for conversion (the "Conversion
Agent"). The Issuer may appoint the Transfer Agent, the Paying Agent and the
Conversion Agent and may appoint one or more additional paying agents and one or
more additional conversion agents in such other locations as it shall determine.
The term "Paying Agent" includes any additional paying agent and,



                                       3
<PAGE>


with respect to payments hereunder by delivery of Class A Common Shares, may
include the Common Share Transfer Agent, and the term "Conversion Agent"
includes any additional conversion agent. The Issuer may change any Paying Agent
or Conversion Agent without prior notice to any holder. The Issuer shall notify
the Registrar of the name and address of any Paying Agent or Conversion Agent
appointed by the Issuer. If the Issuer fails to appoint or maintain another
entity as Paying Agent or Conversion Agent, the Transfer Agent shall act as
such. The Issuer or any of its Affiliates may act as Paying Agent, Transfer
Agent, or Conversion Agent.

                  (b) Notwithstanding any provision to the contrary herein, so
long as a Global Certificate remains outstanding and is held by or on behalf of
the Depositary or a successor of the Depositary, transfers of a Global
Certificate, in whole or in part, or of any beneficial interest therein, shall
only be made in accordance with Section 4 and this Section 5; provided, however,
that beneficial interests in a Global Certificate may be transferred to persons
who take delivery thereof in the form of a beneficial interest in the same
Global Certificate in accordance with the transfer restrictions set forth in the
Restricted Shares Legend:

                  (i) Except for transfers or exchanges made in accordance with
         clause (b)(ii) of this Section 5, transfers of a Global Certificate
         shall be limited to transfers of such Global Certificate in whole, but
         not in part, to nominees of the Depositary or to a successor of the
         Depositary or such successor's nominee.

                  (ii) If Definitive Securities are issued and a holder of
         Definitive Securities bearing a Restricted Shares Legend ("Restricted
         Definitive Securities") wishes at any time to transfer all or part of
         the Series A Preferred Shares represented by such Restricted Definitive
         Securities to a person who is required to take delivery thereof in the
         form of Restricted Definitive Securities, such holder may, subject to
         the restrictions on transfer set forth herein and in the certificate
         representing such Series A Preferred Shares, cause the exchange of the
         certificate representing such Series A Preferred Shares for one or more
         Restricted Definitive Securities evidencing such Series A Preferred
         Shares. Upon receipt by the Transfer Agent, at its office in The City
         of New York of (A) the certificate representing such Series A Preferred
         Shares, duly endorsed as provided herein, (B) instructions from such
         holder



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<PAGE>



         directing the Transfer Agent to authenticate and deliver one or more
         Restricted Definitive Securities evidencing such Series A Preferred
         Shares, such instructions to contain the name of the transferee and the
         number of such Series A Preferred Shares to be represented by the
         Restricted Definitive Securities so issued to such transferee and
         appropriate delivery instructions, (C) a certificate from the holder of
         the Restricted Definitive Securities to be exchanged in the form of
         Exhibit B and, if applicable, Exhibit C attached hereto given by the
         transferor, to the effect set forth therein and (D) such other
         certifications, legal opinions or other information as the Issuer or
         the Transfer Agent may reasonably require to confirm that such transfer
         is being made pursuant to an exemption from, or in a transaction not
         subject to, the registration requirements of the Securities Act, then
         the Transfer Agent shall cancel or cause to be canceled such Restricted
         Definitive Securities and concurrently therewith, in accordance with
         the instructions referred to above, the Issuer shall execute, and the
         Transfer Agent shall countersign and deliver, one or more Restricted
         Definitive Securities representing in the aggregate the number of
         Series A Preferred Shares represented by the Definitive Restricted
         Securities so exchanged.

                  (c) In the case of (x) certificates representing Class A
Common Shares issued (A) as dividends on Series A Preferred Shares, (B) on
conversion of Series A Preferred Shares or (C) in redemption of Series A
Preferred Shares, and any securities into which such Series A Preferred Shares
or Class A Common Shares shall be converted or into which they shall be changed
by operation of law or otherwise, (y) certificates representing Series A
Preferred Shares issued upon the transfer, exchange or replacement of Series A
Preferred Shares bearing the Restricted Shares Legend, or (z) if a request is
made to remove such Restricted Shares Legend on certificates representing Series
A Preferred Shares, certificates representing the Class A Common Shares or
Series A Preferred Shares so issued shall bear the Restricted Shares Legend, or
the Restricted Shares Legend shall not be removed, as the case may be, unless
there is delivered to the Issuer and the Transfer Agent such satisfactory
evidence, which may include an opinion of counsel licensed to practice law in
the State of New York, as may be reasonably required by the Issuer or the
Transfer Agent, that neither the legend nor the restrictions on transfer set
forth therein are required to ensure that transfers of the Class A Common Shares
or Series A Preferred Shares represented by such certificates comply with the



                                       5
<PAGE>



provisions of Rule 144A or Rule 144 or, with respect to Restricted Series A
Preferred Shares, that such Series A Preferred Shares are not "restricted
securities" within the meaning of Rule 144 under the Securities Act or that such
transfer is covered by an effective registration statement under the Securities
Act. Upon provision of such satisfactory evidence, the Transfer Agent, at the
direction of the Issuer, shall countersign and deliver certificates representing
Series A Preferred Shares that do not bear the Restricted Shares Legend.

                  (d) The Transfer Agent shall have no responsibility for any
actions taken or not taken by the Depositary.

                  (e) Each holder of a Series A Preferred Share agrees to
indemnify the Issuer and the Transfer Agent against any liability that may
result from the transfer, exchange or assignment of such holder's Series A
Preferred Share in violation of any provision of this Certificate and/or
applicable U.S. Federal or State securities law; provided, however, that such
indemnity shall not apply to acts of wilful misconduct or gross negligence on
the part of the Issuer or the Transfer Agent, as the case may be.

                  (f) Payments (whether in cash or, as permitted by Section 11,
in Class A Common Shares) due on the Series A Preferred Shares shall be payable
at the office or agency of the Issuer maintained for such purpose in The City of
New York and at any other office or agency maintained by the Issuer for such
purpose. If any such payment is in cash, it shall be payable by United States
dollar check drawn on, or wire transfer (provided that appropriate wire
instructions have been received by the Transfer Agent at least 15 days prior to
the applicable date of payment) to a United States dollar account maintained by
the holder with, a bank located in New York City; provided, however, that any
cash payments in respect of any dividends on and any redemption payment with
respect to any Global Certificate will be made to the Global Certificate Holder
or its nominee, as registered owner of the Global Certificate, by wire transfer
of immediately available funds on each Dividend Payment Date or Redemption
Effective Date, as applicable. Neither the Issuer nor the Transfer Agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in any Global
Certificate or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interest.



                                       6
<PAGE>


                  6. Dividend Rights. (a) The Issuer shall pay, and the holders
of the Series A Preferred Shares shall be entitled to receive, cumulative
dividends from the date of initial issuance of such Series A Preferred Shares at
a rate of 7-1/2% per annum on the amount of the liquidation preference of the
Series A Preferred Shares. Dividends will be computed on the basis of a 360-day
year consisting of twelve 30-day months and are deemed to accrue on a daily
basis. Dividends are payable quarterly in arrears, subject to Section 11, on
February 1, May 1, August 1 and November 1 of each year (each a "Dividend
Payment Date"), commencing August 1, 2000, until the liquidation preference
thereof is paid or made available for payment; provided, however, that if such
date is not a Business Day, then the Dividend Payment Date shall be the next
Business Day. The Issuer may elect not to declare dividend payments on any
Dividend Payment Date; provided, however, that dividends on the Series A
Preferred Shares will accrue whether or not the Issuer has earnings or profits,
whether or not there are funds legally available for the payment of such
dividends and whether or not dividends are declared. Dividends will accumulate
to the extent they are not paid on the Dividend Payment Date for the period to
which they relate. Arrearages of Accumulated Dividends will not themselves bear
interest or be added to the liquidation preference of the Series A Preferred
Shares.

                  (b) Pursuant to the terms of the Registration Rights
Agreement, if (i) the Shelf Registration Statement has not been filed within 90
days of the Closing Date or has not been declared effective by the Commission
within 180 days after the Closing Date or (ii) the Shelf Registration Statement
has been filed and declared effective by the Commission but, prior to the time
it is no longer required to be effective under the Registration Rights
Agreement, is not available for the resale of any Transfer Restricted
Securities, because (x) the Shelf Registration Statement is withdrawn by the
Issuer or becomes subject to an effective stop order issued pursuant to Section
8(d) of the Securities Act suspending the effectiveness of the Shelf
Registration Statement (without being succeeded immediately by an additional
registration statement filed and declared effective or (y) the availability of
the Shelf Registration Statement is suspended by the Issuer pursuant to the
Registration Rights Agreement (each of the foregoing clauses (i) and (ii), a
"Registration Default"), the Issuer shall pay special dividends ("Special
Dividends") to each holder of Transfer Restricted Securities at a per annum rate
of 0.5% of the liquidation preference for any Registration Default Period.
Following the cure of all Registration Defaults relating to any Transfer
Restricted Securities, the



                                       7
<PAGE>


accrual of Special Dividends with respect to such Transfer Restricted Securities
shall cease (without in any way limiting the effect of any subsequent
Registration Default). A Registration Default shall be cured on the date that
the Shelf Registration Statement is declared effective by the SEC or on the date
the Shelf Registration Statement is declared effective or becomes usable and
holders of Transfer Restricted Securities are provided notice thereof.

                  (c) The Issuer will be required to pay additional amounts
("Additional Amounts") to the holders of Series A Preferred Shares as additional
dividends to make up for any deduction or withholding for any present or future
taxes, assessments or other governmental charges imposed by (i) Bermuda, (ii)
any jurisdiction (excluding the United States or any political subdivision
thereof) from or through which the Issuer, or its paying agent, is making
payments on the Series A Preferred Shares or (iii) any other jurisdiction
(excluding the United States or any political subdivision thereof) in which the
Issuer, or a successor corporation, is organized or any political subdivision or
governmental authority of or in that jurisdiction with the power to tax (each an
"Applicable Jurisdiction"), in respect of any amounts that the Issuer or a
successor corporation must pay with respect to the Series A Preferred Shares, so
that the net amounts paid to the holders of the Series A Preferred Shares, after
that deduction or withholding, will be not less than the amount specified as
payable with respect to those shares. However, the Issuer will not be obligated
to pay additional amounts to any holder of Series A Preferred Shares that: (i)
resides in or is a citizen of an Applicable Jurisdiction; or (ii) is a
fiduciary, partnership or limited liability company if, and to the extent that,
the payment of Additional Amounts would not have been required if the Series A
Preferred Shares were held directly by a beneficiary or settlor with respect to
that fiduciary or a member of that partnership or limited liability company. In
addition, the Issuer will not be obligated to pay any Additional Amounts to a
holder of Series A Preferred Shares on account of: (i) any tax, assessment or
other governmental charge that would not have been imposed but for (a) the
existence of any present or former connection between such holder, or certain
other persons, and the Applicable Jurisdiction, (b) the presentation of Series A
Preferred Shares for payment more than 60 days after the relevant payment is due
or (c) the presentation of Series A Preferred Shares for payment in Bermuda or
any political subdivision of or in Bermuda, unless those shares could not have
been presented for payment elsewhere; (ii) any estate, inheritance, gift, sales,
transfer, excise, personal property or similar tax,



                                       8
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assessment or other governmental charge; (iii) any tax, assessment or other
governmental charge that is payable otherwise than by withholding from payment
of the liquidation preference of or any dividends or redemption premium on the
Series A Preferred Shares; (iv) any tax, assessment or other governmental charge
that is imposed or withheld by reason of the failure by the holder or the
beneficial owner of the Series A Preferred Shares to comply with a request by
the Issuer to (a) provide information, documents or other evidence concerning
the nationality, residence, identity or connection with the Applicable
Jurisdiction of the holder or beneficial owner or (b) make and deliver any
declaration or other similar claim, other than a claim for refund of a tax,
assessment or other government charge withheld by the Issuer, or satisfy any
information or reporting requirements, which, in the case of clause (a) or (b),
is required or imposed by a statute, treaty, regulation or administrative
practice of the taxing jurisdiction as a precondition to exemption from all or
part of that tax, assessment or other governmental charge; or (v) any
combination of the items above.

                  7. Payment of Dividends; Mechanics of Payment; Dividend Rights
Preserved. (a) Dividends on any Series A Preferred Share which are payable, and
are punctually paid or duly provided for, on any Dividend Payment Date shall be
paid in arrears to the person in whose name such Series A Preferred Share (or
one or more predecessor Series A Preferred Shares) is registered at the close of
business on the next preceding January 15, April 15, July 15 and October 15
(each, together with any record date established for the payment of Accumulated
Dividends, a "Dividend Record Date").

                  (b) No dividend whatsoever shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any outstanding share of
the Series A Preferred Shares with respect to any dividend period unless all
dividends for all preceding dividend periods have been declared and paid, or
declared and a sufficient sum set apart for the payment of such dividends, upon
all outstanding Series A Preferred Shares. Unless full cumulative dividends on
all outstanding Series A Preferred Shares for all past dividend periods shall
have been declared and paid, or declared and a sufficient sum for the payment
thereof set apart, then:

                  (i) no dividend (other than a dividend payable solely in any
         Junior Shares or Parity Shares or partial cash or property dividend on
         Parity Shares that is paid pro rata on the Series A Preferred Shares)
         shall be declared or paid upon, or any sum set apart for the



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         payment of dividends upon, any Junior Shares or Parity Shares,
         respectively;

                  (ii) no other distribution shall be declared or made upon, or
         any sum set apart for the payment of any distribution upon, any Junior
         Shares or Parity Shares, other than a distribution consisting solely of
         Junior Shares or Parity Shares, respectively;

                  (iii) no Junior Shares or Parity Shares or any warrants,
         rights, calls or options exercisable for or convertible into any Parity
         Share or Junior Share shall be purchased, redeemed or otherwise
         acquired (other than in exchange for other Junior Shares or Parity
         Shares, respectively) by the Issuer or any of its subsidiaries; and

                  (iv) no monies shall be paid into or set apart or made
         available for a sinking or other like fund for the purchase, redemption
         or other acquisition of any Junior Shares or Parity Shares or any
         warrants, rights, calls or options exercisable for or convertible into
         any Parity Share or Junior Share by the Issuer or any of its
         subsidiaries.

                  (c) Holders of the Series A Preferred Shares will not be
entitled to any dividends, whether payable in cash, property or stock, in excess
of the full cumulative dividends as herein described. In the event that the
Issuer fails to pay the dividends due for an aggregate of six quarterly payments
(whether or not consecutive), the holders will have the rights and remedies set
forth in Section 8.

                  (d) Subject to the requirements of Section 11, any Accumulated
Dividends on any Series A Preferred Share may be paid, subject to Section 11, by
the Issuer in any lawful manner (which shall include the establishment of a
record date not more then 45 days prior to the payment thereof) not inconsistent
with the requirements of any securities exchange on which the Series A Preferred
Shares may be listed, and upon such notice (which shall precede the record date
by at least ten Business Days) as may be required by such exchange, if, after
notice given by the Issuer to the Transfer Agent of the proposed payment
pursuant to this clause (d), such manner of payment shall be deemed practicable
by the Transfer Agent.

                  (e) Subject to the foregoing provisions of this Section 7,
each Series A Preferred Share delivered under this Certificate upon registration
of transfer of or in exchange for or in lieu of any other Series A Preferred



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<PAGE>


Share shall carry the rights to dividends accumulated and unpaid, and to accrue,
which were carried by such other Series A Preferred Share.

                  (f) The holder of record of a Series A Preferred Share at the
close of business on a Dividend Record Date with respect to the payment of
dividends on the Series A Preferred Shares will be entitled to receive such
dividends with respect to such Series A Preferred Share on the corresponding
Dividend Payment Date, notwithstanding the conversion of such shares after such
Dividend Record Date and prior to such Dividend Payment Date. A Series A
Preferred Share surrendered for conversion during the period from the close of
business on any Dividend Record Date to the opening of business of the
corresponding Dividend Payment Date must be accompanied by a payment in cash,
Class A Common Shares or a combination thereof, depending on the method of
payment that the Issuer has chosen to pay such dividend, in an amount equal to
such dividend payable on such Dividend Payment Date, unless such Series A
Preferred Shares have been called for redemption on a redemption date occurring
during the period from the close of business on any Dividend Record Date to the
close of business on the corresponding Dividend Payment Date. The dividend
payment with respect to a Series A Preferred Share called for redemption on a
date during the period from the close of business on any Dividend Record Date to
the close of business on the corresponding Dividend Payment Date will be payable
on such Dividend Payment Date to the record holder of such share on such
Dividend Record Date if such share has been converted after such Dividend Record
Date and prior to such Dividend Payment Date. Notwithstanding the immediately
preceding three sentences of this Section 7(f), no payment shall be owed or
payable to or by any converting holder if the Board of Directors of the Issuer
shall have elected to defer the dividend payment to be made on such Dividend
Payment Date pursuant to Section 6(a). Fractional Class A Common Shares will not
be issued upon conversion, but in lieu thereof the Transfer Agent will pay a
cash adjustment in the manner set forth in Section 11(c).

                  (g) No payment or adjustment will be made upon conversion of
Series A Preferred Shares for accumulated and unpaid dividends or for dividends
with respect to the Class A Common Shares issued upon such conversion.

                  8. Voting Rights. (a) Holders of Series A Preferred Shares
will not be entitled to any voting rights (i) except as required by law and (ii)
except as follows: If at any time the equivalent of six quarterly dividends on
the Series A Preferred Shares are accrued and unpaid, then


                                       11
<PAGE>



the total number of Directors constituting the entire Board of Directors of the
Issuer shall be increased by two and, whether or not consecutive and whether or
not declared, the holders of a majority of the Series A Preferred Shares shall
have the right to elect two Directors. This right will continue until all
dividends in arrears on the Series A Preferred Shares are paid in full, at which
time the term of office of any such members of the Board of Directors so elected
shall terminate and such directors shall be deemed to have resigned. At any time
after voting power to elect Directors shall have become vested and be continuing
in the holders of the Series A Preferred Shares pursuant to the second preceding
sentence, or if a vacancy shall exist in the offices of Series A Preferred Share
Directors, the Board of Directors may, and upon written request of the holders
of record of at least 25% of the Outstanding Series A Preferred Shares addressed
to the Board of Directors of the Issuer, shall, call a special meeting of the
holders of the Series A Preferred Shares for the purpose of electing the Series
A Preferred Share Directors that such holders are entitled to elect. At any
meeting held for the purpose of electing Series A Preferred Share Directors, the
presence in person or by proxy of the holders of at least a majority of the
Outstanding Series A Preferred Shares shall be required to constitute a quorum
of such Series A Preferred Shares. Any vacancy occurring in the office of a
Series A Preferred Share Director may be filled by the remaining Series A
Preferred Share Director unless and until such vacancy shall be filled by the
holders of the Series A Preferred Shares.

                  (b) In addition to the voting rights set forth above, the
approval of the holders of at least 66-2/3% of the then-Outstanding Series A
Preferred Shares voting or consenting, as the case may be, as one class, will be
required for the Issuer to amend this Certificate, so as to affect adversely the
specified rights, preferences, privileges or voting rights of holders of the
Series A Preferred Shares; provided, however, that no such modification or
amendment may, without the consent of the holders of each Outstanding Series A
Preferred Share affected thereby, (i) change the Mandatory Redemption Date, the
dates on which payments are to be made pursuant to Optional Redemption, or any
Dividend Payment Date, (ii) reduce the liquidation preference, the rate of
dividends, the redemption prices or the purchase price thereof pursuant to
Section 13, (iii) change the place of payment where, or the coin or currency in
which, any Series A Preferred Share or any payment thereon is payable, (iv)
adversely affect the rights to convert any Series A Preferred Share as provided
in Section 12, (v) alter the voting rights with respect to the Series A
Preferred Shares


                                       12
<PAGE>



or reduce the percentage of the Outstanding Series A Preferred Shares the
consent of whose holders is required for any such modification, or the consent
of whose holders is required for any waiver of compliance with provisions of
this Certificate or (vi) modify any of the provisions of this Section 8 except
to increase any such percentage or to provide that certain other provisions of
this Certificate cannot be modified or waived without the consent of the holder
of each Outstanding Series A Preferred Share affected thereby.

                  (c) The Issuer will not authorize any new class of Senior
Shares or any obligation or security convertible or exchangeable into or
evidencing a right to purchase shares of any class or series of Senior Shares,
without the approval of the holders of at least 66-2/3% of the then-Outstanding
Series A Preferred Shares, voting or consenting, as the case may be, as one
class.

                  (d) Except as set forth in Section 8(c) with respect to Senior
Shares, neither (i) the creation, authorization or issuance of any Junior
Shares, Parity Shares or Senior Shares or (ii) the increase or decrease in the
amount of authorized capital stock of any class, including any Series A
Preferred Shares, shall require the consent of the holders of the Series A
Preferred Shares or shall be deemed to affect adversely the rights, preferences,
privileges, special rights or voting rights of holders of Series A Preferred
Shares. Furthermore, the consent of the holders of Series A Preferred Shares
will not be required for the Issuer to authorize, create (by way of
reclassification or otherwise) or issue any Parity Shares or Junior Shares or
any obligation or security convertible or exchangeable into, or evidencing a
right to purchase, shares of any class or series of Parity Shares or Junior
Shares.

                  9. Ranking. (a) The Series A Preferred Shares will, with
respect to dividend rights and rights on liquidation, winding-up and
dissolution, rank (i) junior to all of the Issuer's existing and future
indebtedness and other obligations; (ii) junior to each class of capital stock
or series of preferred shares that the Issuer establishes after February 22,
2000 the terms of which expressly provide that such class or series will rank
senior to the Series A Preferred Shares as to dividend distributions and
distributions upon the Issuer's liquidation, winding-up and dissolution ("Senior
Shares"); (iii) on parity with each other class of capital stock or series of
preferred shares that the Issuer establishes after February 22, 2000 the terms
of which expressly provide that



                                       13
<PAGE>


such class or series will rank on a parity with the Series A Preferred Stock as
to dividend distributions and distributions upon the Issuer's liquidation,
winding-up and dissolution ("Parity Shares"); and (iv) senior to all classes of
the Issuer's Class A Common Shares and to each other class of capital stock or
series of the Issuer's preferred shares established after February 22, 2000 the
terms of which do not expressly provide that it ranks senior to or on a parity
with the Series A Preferred Shares as to dividend distributions and
distributions upon the Issuer's liquidation, winding-up and dissolution
(together with the Issuer's Class A Common Shares,"Junior Shares").

                  (b) No dividend whatsoever shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any outstanding Series A
Preferred Share with respect to any dividend period unless all dividends for all
preceding dividend periods have been declared and paid, or declared and a
sufficient sum set apart for the payment of such dividends, upon all outstanding
Senior Shares.

                  (c) In the event of any liquidation, dissolution or winding-up
of the Issuer, whether voluntary or involuntary, the holders of the Series A
Preferred Shares then Outstanding shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Issuer to the holders
of Class A Common Shares or Junior Shares by reason of their ownership thereof,
the liquidation preference of $50 per share for each Outstanding Series A
Preferred Share, plus, without duplication, an amount equal to all Accumulated
Dividends (including Special Dividends and Additional Amounts, if any) thereon
to the date fixed for liquidation, dissolution or winding-up (including an
amount equal to a pro rata dividend for the period from the last Dividend
Payment Date to the date fixed for liquidation, dissolution or winding-up). If
upon the occurrence of such event the assets thus distributed among the holders
of Series A Preferred Shares shall be insufficient to permit the payment to such
holders of the full preferential amount, the entire assets of the Issuer legally
available for distribution shall be distributed ratably based upon their
respective liquidation preference among the holders of the Series A Preferred
Shares pari passu with the holders of all Parity Shares. Except as provided in
Section 9(d), all amounts payable in respect of the Series A Preferred Shares in
the event of any liquidation, dissolution or winding up of the Issuer shall be
paid in cash. After payment of the full preferential amount (and, if applicable,
an amount equal to a pro rata dividend to the holders of Outstanding Series A
Preferred


                                       14
<PAGE>



Shares), such holders shall not be entitled to any further participation in any
distribution of assets of the Issuer.

                  (d) Notwithstanding the foregoing, in the case of liquidation,
dissolution or winding-up in connection with any transaction that is treated as
a sale, assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the Issuer's assets under Section 14 in which the Issuer
receives in exchange for such assets, among other things, Replacement Preferred
Shares, the liquidation preference of each Series A Preferred Share, and any
other entitlement in respect of a Series A Preferred Share to receive any
distribution in connection with such liquidation, dissolution or winding-up,
shall be satisfied and discharged in full, upon distribution to the holders of
Series A Preferred Shares of such Replacement Preferred Shares, provided that
each holder of Series A Preferred Shares receives Replacement Preferred Shares
that, among other things, are convertible into the kind and amount securities,
cash and other property that such holder would have received had such holder
converted such holder's Series A Preferred Shares into Class A Common Shares
immediately prior to such transaction.

                  10. Redemption. (a) The Series A Preferred Shares may be
redeemed at any time commencing on or after February 1, 2005, in whole or from
time to time in part, at the election of the Issuer (the "Optional Redemption"),
at the redemption price per share set forth below plus accumulated and unpaid
dividends (including an amount equal to a prorated dividend for any partial
dividend period) and Additional Amounts and Special Dividends, if any, to the
Business Day specified as the date of redemption in the notice to the holders of
Series A Preferred Shares described below (the "Redemption Effective Date"), if
redeemed in the 12-month period commencing on the dates set forth below (unless
such date is not a Business Day in which case such period will commence on the
next succeeding Business Day):

Date                                                Redemption Price
----                                                ----------------
February 1, 2005                                         $51.875
February 1, 2006                                         $51.500
February 1, 2007                                         $51.125
February 1, 2008                                         $50.750
February 1, 2009                                         $50.375
February 1, 2010 and thereafter                          $50.000


                                       15
<PAGE>


         (b) The Series A Preferred Shares may be redeemed at any time in whole
or from time to time in part, at the election of the Issuer (the "Tax
Redemption"), at 100% of the liquidation preference per share plus accumulated
and unpaid dividends (including an amount equal to a prorated dividend for any
partial dividend period) and Additional Amounts and Special Dividends, if any,
to the Redemption Effective Date, if after the issue date of the Series A
Preferred Shares there is (i) a change in or amendment to laws, regulations or
rulings of any Applicable Jurisdiction, (ii) a change in the official
application or interpretation of those laws, regulations or rulings or (iii) any
execution of or amendment to any treaty affecting taxation to which any
Applicable Jurisdiction is party, in each case that would require the Issuer or
any successor corporation to pay Additional Amounts with respect to any shares
of Series A Preferred Shares on the next succeeding Dividend Payment Date, and
the payment of those Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Issuer or any successor corporation.

         (c) With regards to the Optional Redemption and the Tax Redemption, on
the Redemption Effective Date (i) all cash to be paid as part of the redemption
price will become payable, (ii) all dividends on the Series A Preferred Shares
to be redeemed will cease to accrue, and (iii) the right to convert the Series A
Preferred Shares to be redeemed will cease at the close of business.

         If any Class A Common Shares are to be delivered as part of the
redemption price, (x) the number of Class A Common Shares to be delivered will
be determined on the basis of the average of the closing market prices of those
shares for the 10 Trading Days following the Redemption Effective Date and (y)
those shares will be deliverable on the 12th Trading Day following the
Redemption Effective Date.

         In the case of any partial redemption, the Issuer will select the
Series A Preferred Shares to be redeemed on a pro rata basis, by lot or any
other method that the Issuer, in its sole discretion, deems fair and
appropriate; provided that the Issuer may redeem all shares held by holders of
fewer than 100 Series A Preferred Shares (or by holders that would hold fewer
than 100 Series A Preferred Shares following such redemption) prior to the
Issuer's redemption of other Series A Preferred Shares.

         If the Redemption Effective Date falls after a Dividend Record Date and
before the related Dividend Payment Date, the holders of Series A Preferred
Shares at the close


                                       16
<PAGE>



of business on that Dividend Record Date will be entitled to receive the
dividend payable on those shares on the corresponding Dividend Payment Date,
even if those shares are redeemed after that Dividend Record Date.

         (d) The Series A Preferred Shares (if not earlier redeemed or
converted) shall be mandatorily redeemed (the "Mandatory Redemption") by the
Issuer on February 1, 2012, 2012 (the "Mandatory Redemption Date") (unless such
date is not a Business Day, in which case the Mandatory Redemption Date shall be
the next Business Day), at a redemption price of 100% of the liquidation
preference per share plus accumulated and unpaid dividends and Special
Dividends, if any, to the Mandatory Redemption Date.

         (e) No Optional Redemption may be authorized or made unless, prior to
giving the applicable redemption notice, all Accumulated Dividends and unpaid
dividends for periods ended prior to the date of such redemption notice shall
have been paid in cash or, subject to Section 11, in Class A Common Shares.

         (f) In the event the Issuer elects to effect an Optional Redemption or
a Tax Redemption, the Issuer shall give a redemption notice (the "Redemption
Notice") to the holders of Series A Preferred Shares not fewer than 30 days nor
more than 60 days before the Redemption Effective Date. Whenever a Redemption
Notice is required to be delivered to the holders, such notice shall provide the
information set forth below and be given by first class mail, postage prepaid to
each holder of Series A Preferred Shares to be redeemed, at such holder's
address appearing in the Series A Preferred Share Register. All Redemption
Notices shall identify the Series A Preferred Shares to be redeemed (including
CUSIP number) and shall state:

                  (i) the Redemption Effective Date;

                  (ii) the redemption price (the "Redemption Price");

                  (iii) the form of consideration the Issuer will use to satisfy
         the Redemption Price;

                  (iv) if any portion of the redemption price is to be paid by
         the delivery of Class A Common Shares, the method for determining the
         applicable Average Market Value and the date on which the Class A
         Common Shares will be deliverable;



                                       17
<PAGE>


                           (v) if fewer than all the outstanding Series A
                  Preferred Shares are to be redeemed, the identification (and,
                  in the case of partial redemption, the certificate number, the
                  total number of shares represented thereby and the number of
                  such shares being redeemed on the Redemption Date) of the
                  particular Series A Preferred Shares to be redeemed;

                           (vi) that on the Redemption Date the Redemption
                  Price, together with (subject to Section 10(j)) dividends
                  accumulated and unpaid to the Redemption Date (including an
                  amount equal to a prorated dividend for any partial dividend
                  period), will become due and payable upon each such Series A
                  Preferred Share to be redeemed and that dividends thereon will
                  cease to accrue on and after said date;

                           (vii) the conversion price (and, if applicable, the
                  amount of cash payable on conversion pursuant to Section
                  12(d)(x)), the date on which the right to convert Series A
                  Preferred Shares to be redeemed will terminate and the place
                  or places where such Series A Preferred Shares may be
                  surrendered for conversion; and

                           (viii) the place or places where such Series A
                  Preferred Shares are to be surrendered for payment of the
                  Redemption Price.

         The Redemption Notice shall be given by the Issuer or, at the Issuer's
request, by the Transfer Agent in the name and at the expense of the Issuer;
provided that if the Issuer so requests, it shall provide the Transfer Agent
adequate time, as reasonably determined by the Transfer Agent, to deliver such
notices in a timely fashion.

         (g) Prior to any Redemption Date, the Issuer shall deposit with the
Transfer Agent or with a Paying Agent (or, if the Issuer is acting as its own
Paying Agent, segregate and hold in trust) an amount of consideration sufficient
to pay the Redemption Price of and (except to the extent payable to a holder of
Series A Preferred Shares on a Dividend Record Date prior to the Redemption
Effective Date) accrued but unpaid dividends (including an amount equal to a
prorated dividend for any partial dividend period) on all the Series A Preferred
Shares which are to be redeemed on that date other than any Series A Preferred
Shares called for redemption on that date which have been converted into Class A
Common Shares prior to the date of such deposit. If


                                       18
<PAGE>


any Series A Preferred Share called for redemption is converted, any
consideration deposited with the Transfer Agent or with any Paying Agent or so
segregated and held in trust for the redemption of such Series A Preferred Share
shall (subject to any right of the holder of such Series A Preferred Share or
any predecessor Series A Preferred Share to receive accrued but unpaid dividends
thereon as provided in Section 7(f)) be paid or delivered to the Issuer upon
Issuer Order or, if then held by the Issuer, shall be discharged from such
trust.

         (h) Notice of redemption having been given as aforesaid, the Series A
Preferred Shares so to be redeemed shall, on the Redemption Effective Date,
become due and payable at the Redemption Price therein specified, and from and
after such date (unless the Issuer shall default in the payment of the
Redemption Price and accrued but unpaid dividends) dividends on such Series A
Preferred Shares shall cease to accrue and such shares shall cease to be
convertible into Class A Common Shares. Upon surrender of any such Series A
Preferred Shares for redemption in accordance with said notice, such Series A
Preferred Shares shall be redeemed, subject to Section 7(f), by the Issuer at
the Redemption Price, together with (except to the extent payable to a holder of
Series A Preferred Shares on a Dividend Record Date prior to the Redemption
Effective Date) accrued but unpaid dividends and Special Dividends, if any, to
the Redemption Date. If any Series A Preferred Share called for redemption shall
not be so paid upon surrender thereof for redemption, the Redemption Price
thereof, exclusive of accrued but unpaid dividends, shall, until paid, bear
interest from the Redemption Date at the dividend rate payable on the Series A
Preferred Shares.

         (i) Any certificate that represents more than one Series A Preferred
Share and is to be redeemed only in part shall be surrendered at any office or
agency of the Issuer designated for that purpose (with, if the Issuer or the
Transfer Agent so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Issuer and the Transfer Agent duly executed
by, the holder thereof or his attorney duly authorized in writing), and the
Issuer shall execute, and the Transfer Agent shall countersign and deliver to
the holder of such Series A Preferred Share without service charge, a new Series
A Preferred Share certificate or certificates, representing any number of Series
A Preferred Shares as requested by such holder, in aggregate amount equal to and
in exchange for the number of shares not redeemed and represented by the Series
A Preferred Share certificate so surrendered.



                                       19
<PAGE>


         (j) If a Series A Preferred Share is redeemed subsequent to a Dividend
Record Date with respect to any Dividend Payment Date specified above and on or
prior to such Dividend Payment Date, then any accumulated but unpaid dividends
will be paid to the person in whose name such Series A Preferred Share is
registered at the close of business on such Dividend Record Date.

         11. Method of Payments and Public Announcement. (a) The Issuer may make
any payments due on the Series A Preferred Shares (other than, except as
provided in Section 9(d), payments of the liquidation preference and any
Accumulated Dividends pursuant to Section 9, which shall be made in cash),
including each regular dividend payment, Special Dividend payment, if any,
Additional Amount payment, if any, Optional Redemption payment, Tax Redemption
payment and Mandatory Redemption payment and any payments due under Section 13
as a result of a Change of Control, (i) in cash, (ii) by delivery of Class A
Common Shares or (iii) a combination thereof, as provided in this Section 11.
The Issuer will take all actions required or permitted under The Companies Act
1981 of Bermuda (the "Companies Act") to permit the payments on the Series A
Preferred Shares provided in this Certificate.

         (b) The Issuer will make each regular dividend payment, Special
Dividend payment, if any, Additional Amount payment, if any, Optional Redemption
payment, Tax Redemption payment and Mandatory Redemption payment on the Series A
Preferred Shares and any payment due under Section 13 as a result of a Change of
Control, in cash, except to the extent it has elected to make all or any portion
of such payment in Class A Common Shares. If the Issuer elects to make any such
payment, or any portion thereof, by delivery of Class A Common Shares, such
shares shall be valued for such purpose at 95% of the Average Market Value.
However, in the event that in any of the foregoing situations on the date of
such payment a Shelf Registration Statement is required to be effective under
the Registration Rights Agreement and is not effective the Class A Common Shares
shall be valued for such purpose at 80% of the Average Market Value.

         If the Issuer is prevented by Bermuda law from making any such payment
in cash or by issuing Class A Common Shares, the Issuer will issue from the
share premium attributable to the Series A Preferred Shares that number of
additional Series A Preferred Shares that is convertible at the then effective
Conversion Rate into the number of Class A Common Shares deliverable to holders
on such payment date ("Bonus Shares"). Upon delivery of Class A Common Shares
(including any Class A Common Shares issued upon


                                       20
<PAGE>


conversion by the Issuer of Bonus Shares) in respect of any such payments,
including any regular dividend, Special Dividend, if any, Additional Amount
payment, if any, Optional Redemption payment, Tax Redemption payment or
Mandatory Redemption payment or any payment due under Section 13 as a result of
a Change of Control, such payment shall be deemed to have been paid and
discharged to the extent of the value (determined as provided above) of the
Class A Common Shares so delivered.

         (c) No fractional Class A Common Shares will be delivered to the
holders of Series A Preferred Shares, but the Transfer Agent will instead
deliver a cash adjustment to each holder of Series A Preferred Shares that would
otherwise be entitled to a fraction of a Class A Common Share. The amount of
such cash adjustment will be determined based on, and such adjustments will be
paid from, the proceeds received by the Transfer Agent from the sale of that
number of Class A Common Shares, which the Issuer will deliver to the Transfer
Agent for such purpose, equal to the aggregate of all such fractions (round up
to the nearest whole share). The Transfer Agent is authorized and directed to
sell such shares at the best available prices and distribute the proceeds to the
holders in proportion to their respective interests therein. The Issuer will pay
the expenses of the Transfer Agent with respect to such sale, including
brokerage commissions.

         (d) Any portion of any payment on or in respect of the Series A
Preferred Shares that is declared and not paid through the delivery of Class A
Common Shares will be paid in cash.

         (e) The Issuer will notify the Transfer Agent and make a public
announcement (i) no later than the close of business on the tenth Business Day
prior to the Dividend Record Date for each regular dividend or Special Dividend
as to whether the Issuer will make the required payment on the related Dividend
Payment Date, and, if so, whether the Issuer will make such payment in cash, by
delivery of Class A Common Shares or a combination thereof, (ii) no later than
the close of business on the fifteenth Business Day prior to the Mandatory
Redemption Date, whether the Issuer will make the payment required on the
Mandatory Redemption Date in cash, by delivery of Class A Common Shares or a
combination thereof, (iii) no later than the close of business on the 30th day
prior to any Redemption Effective Date, whether the Issuer will make the
required payment in cash, by delivery of Class A Common Shares or a combination
thereof. The Issuer will make any public announcement required by this Section
by a press release


                                       21
<PAGE>


issued to Dow Jones News Service and Bloomberg News Service or their respective
successors. The Issuer will also deliver or mail a copy of each announcement to
each record holder of Series A Preferred Shares.

         (f) Prior to the issuance of any Class A Common Shares pursuant to this
Section 11, the Issuer shall have provided for the listing or quotation of such
Class A Common Shares on the Nasdaq National Market or any other securities
exchange in the United States upon which the Class A Common Shares are then
listed or quoted.

         12. Conversion. (a) Subject to and upon compliance with the provisions
of this Certificate, at the option of the holder thereof, any Series A Preferred
Share may be converted at any time prior to the close of business on the
Mandatory Redemption Date, unless previously redeemed, at the option of the
holder thereof, into fully paid and non-assessable Class A Common Shares at the
then effective Conversion Rate per Series A Preferred Share. A holder's right to
convert Series A Preferred Shares called for redemption will terminate at the
close of business on the applicable Redemption Effective Date and will be lost
if not exercised prior to that time, unless the Issuer defaults in making the
payment due upon redemption under Section 10(d).

         Subject to and upon compliance with the provisions of this Certificate,
each Series Preferred Share will be convertible at the Issuer's option at any
time within 24 hours of issuance, unless the Issuer waives its conversion right
in writing, into fully paid and non-assessable Class A Common Shares at the then
effective conversion rate. The Issuer may waive or exercise its conversion right
with respect to any Series A Preferred Share in advance of their issuance by
written notice to the transfer agent. Any such waiver or notice will be
irrevocable.

         The "Conversion Rate" shall be equal to $50 per Series A Preferred
Share divided by the Conversion Price. The "Conversion Price" shall be initially
$22.14 per share. The Conversion Price shall be adjusted in certain instances as
provided in Section 12(d) and Section 12(e).

         (b) In order to exercise the conversion privilege, the holder of any
Series A Preferred Share to be converted shall surrender the certificate for
such share, duly endorsed or assigned to the Issuer or in blank, at any office
or agency of the Issuer maintained for that purpose, accompanied by written
notice to the Issuer at such office


                                       22
<PAGE>


or agency that the holder elects to convert such share or, if fewer than all the
Series A Preferred Shares represented by a single share certificate are to be
converted, the number of shares represented thereby to be converted. Except as
provided in Section 10(a) or 7(f), no payment or adjustment shall be made upon
any conversion on account of any dividends accrued on the Series A Preferred
Shares surrendered for conversion or on account of any dividends on the Class A
Common Shares issued upon conversion. In no event shall the Issuer be obligated
to pay any converting holder any unpaid Accumulated Dividends upon conversion.

         Series A Preferred Shares shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
shares for conversion in accordance with the foregoing provisions, and at such
time the rights of the holders of such shares as holders shall cease, and the
person or persons entitled to receive the Class A Common Shares issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Class A Common Shares at such time. As promptly as practicable on or after
the conversion date, the Issuer shall issue and shall deliver at such office or
agency a certificate or certificates for the number of full Class A Common
Shares issuable upon conversion, together with payment in lieu of any fraction
of a share, as provided in Section 12(c).

         In the case of any conversion of fewer than all the Series A Preferred
Shares evidenced by a certificate, upon such conversion the Issuer shall execute
and the Transfer Agent shall countersign and deliver to the holder thereof, at
the expense of the Issuer, a new certificate or certificates representing the
number of unconverted Series A Preferred Shares.

         (c) No fractional Class A Common Shares shall be issued upon the
conversion of a Series A Preferred Share; in lieu thereof, the Transfer Agent
will deliver a cash adjustment based upon the Closing Price of the Class A
Common Shares on the Business Day prior to the conversion date. The amount of
such cash adjustment will be determined based on and paid from the proceeds
received by the Transfer Agent from the sale of that number of Class A Common
Shares, which the Issuer will deliver to the Transfer Agent for such purpose,
equal to the aggregate of all such fractions (rounded up to the nearest whole
share).


                                       23
<PAGE>



         (d) The conversion price shall be adjusted from time to time by the
Issuer as follows:

                  (i) if the Issuer shall hereafter pay a dividend or make a
         distribution to holders of any class of its capital stock in Class A
         Common Shares, the Conversion Price in effect at the opening of
         business on the date following the date fixed for the determination of
         shareholders entitled to receive such dividend or other distribution
         shall be reduced by multiplying such Conversion Price by a fraction of
         which the numerator shall be the number of Class A Common Shares
         outstanding at the close of business on the Common Share Record Date
         (as defined in Section 12(d)(vi)) fixed for such determination and the
         denominator shall be the sum of such number of shares and the total
         number of shares constituting such dividend or other distribution, such
         reduction to become effective immediately after the opening of business
         on the day following the Common Share Record Date. If any dividend or
         distribution of the type described in this Section 12(d)(i) is declared
         but not so paid or made, the Conversion Price shall again be adjusted
         to the Conversion Price which would then be in effect if such dividend
         or distribution had not been declared. Not- withstanding the foregoing,
         no adjustment shall be made for the payment in Class A Common Shares
         (or the issuance of any Bonus Shares in connection therewith) in
         respect of the Series A Preferred Shares or in any other series of
         preferred shares with payment provisions that are substantially the
         same as the payment provisions of the Series A Preferred Shares.

                  (ii) if the Issuer shall offer or issue rights or warrants to
         holders of its outstanding Class A Common Shares entitling them to
         subscribe for or purchase Class A Common Shares at a price per share
         less than the Current Market Price (as defined in Section 12(d)(vi)) on
         the Common Share Record Date fixed for the determination of
         shareholders entitled to receive such rights or warrants, the
         Conversion Price shall be adjusted so that the same shall equal the
         price determined by multiplying the Conversion Price in effect at the
         opening of business on the date after such Common Share Record Date by
         a fraction of which the numerator shall be the number of Class A Common
         Shares outstanding at the close of business on the Common Share Record
         Date plus the number of Class A Common Shares which the aggregate
         offering price of the total number of Class A Common Shares subject to
         such rights or warrants would purchase at such Current


                                       24
<PAGE>


         Market Price and of which the denominator shall be the number of Class
         A Common Shares outstanding at the close of business on the Common
         Share Record Date plus the total number of additional Class A Common
         Shares subject to such rights or warrants for subscription or purchase.
         Such adjustment shall become effective immediately after the opening of
         business on the day following the Common Share Record Date fixed for
         determination of shareholders entitled to purchase or receive such
         rights or warrants. To the extent that Class A Common Shares are not
         delivered pursuant to such rights or warrants, upon the expiration or
         termination of such rights or warrants the Conversion Price shall again
         be adjusted to be the Conversion Price which would then be in effect
         had the adjustments made upon the issuance of such rights or warrants
         been made on the basis of delivery of only the number of Class A Common
         Shares actually delivered. If such rights or warrants are not so
         issued, the Conversion Price shall again be adjusted to be the
         Conversion Price which would then be in effect if such date fixed for
         the determination of shareholders entitled to receive such rights or
         warrants had not been fixed. In determining whether any rights or
         warrants entitle the holders to subscribe for or purchase Class A
         Common Shares at less than such Current Market Price, and in
         determining the aggregate offering price of such Class A Common Shares,
         there shall be taken into account any consideration received for such
         rights or warrants, with the value of such consideration, if other than
         cash, to be determined by the Board of Directors;

                  (iii) if the outstanding Class A Common Shares shall be
         subdivided into a greater number of Class A Common Shares, the
         Conversion Price in effect at the opening of business on the day
         following the day upon which such subdivision becomes effective shall
         be proportionately reduced, and, conversely, if the outstanding Class A
         Common Shares shall be combined into a smaller number of Class A Common
         Shares, the Conversion Price in effect at the opening of business on
         the day following the day upon which such combination becomes effective
         shall be proportionately increased, such reduction or increase, as the
         case may be, to become effective immediately after the opening of
         business on the day following the day upon which such subdivision or
         combination becomes effective;

                  (iv) if the Issuer shall, by dividend or otherwise, distribute
         to holders of its Class A Common Shares any



                                       25
<PAGE>


         class of capital stock of the Issuer (other than any dividends or
         distributions to which Section 12(d)(i) applies) or evidences of its
         indebtedness, cash or other assets (including securities, but excluding
         any rights or warrants of a type referred to in Section 12(d)(ii) and
         dividends and distributions paid exclusively in cash and excluding any
         capital stock, evidences of indebtedness, cash or assets distributed
         upon a merger or consolidation to which Section 12(e) applies) (the
         foregoing hereinafter in this Section 12(d)(iv) called the "Distributed
         Securities"), then, in each such case, the Conversion Price shall be
         reduced so that the same shall be equal to the price determined by
         multiplying the Conversion Price in effect immediately prior to the
         close of business on the Common Share Record Date (as defined in
         Section 12(d)(vi)) with respect to such distribution by a fraction of
         which the numerator shall be the Current Market Price (determined as
         provided in Section 12(d)(vi)) on such date less the fair market value
         (as determined by the Board of Directors, whose determination shall be
         conclusive and described in a resolution of the Board of Directors) on
         such date of the portion of the Distributed Securities so distributed
         applicable to one Class A Common Share and the denominator shall be
         such Current Market Price, such reduction to become effective
         immediately prior to the opening of business on the day following the
         Common Share Record Date; provided, however, that, in the event the
         then fair market value (as so determined) of the portion of the
         Distributed Securities so distributed applicable to one Class A Common
         Share is equal to or greater than the Current Market Price on the
         Common Share Record Date, in lieu of the foregoing adjustment, adequate
         provision shall be made so that each holder of Series A Preferred
         Shares shall have the right to receive upon conversion of a Series A
         Preferred Share (or any portion thereof) the amount of Distributed
         Securities such holder would have received had such holder converted
         such Series A Preferred Share (or portion thereof) immediately prior to
         such Common Share Record Date. If such dividend or distribution is not
         so paid or made, the Conversion Price shall again be adjusted to be the
         Conversion Price which would then be in effect if such dividend or
         distribution had not been declared. If the Board of Directors
         determines the fair market value of any distribution for purposes of
         this Section 12(d)(iv) by reference to the actual or when issued
         trading market for any securities constituting all or part of such
         distribution, it must in doing so consider the prices in such market
         over the


                                       26
<PAGE>


         same period used in computing the Current Market Price pursuant to
         Section 12(d)(vi) to the extent possible.

                  Rights or warrants distributed by the Issuer to holders of
         Class A Common Shares entitling the holders thereof to subscribe for or
         purchase shares of the Issuer's capital stock (either initially or
         under certain circumstances), which rights or warrants, until the
         occurrence of a specified event or events ("Dilution Trigger Event"):
         (A) are deemed to be transferred with such Class A Common Shares; (B)
         are not exercisable; and (C) are also issued in respect of future
         issuances of Class A Common Shares, shall be deemed not to have been
         distributed for purposes of this Section 12(d)(iv) (and no adjustment
         to the Conversion Price under this Section 12(d)(iv) shall be required)
         until the occurrence of the earliest Dilution Trigger Event, whereupon
         such rights and warrants shall be deemed to have been distributed and
         an appropriate adjustment to the Conversion Price under this Section
         12(d)(iv) shall be made. If any such rights or warrants, including any
         such existing rights or warrants distributed prior to the first
         issuance of Series A Preferred Shares, are subject to subsequent
         events, upon the occurrence of each of which such rights or warrants
         shall become exercisable to purchase different securities, evidences of
         indebtedness or other assets, then the occurrence of each such event
         shall be deemed to be such date of issuance and record date with
         respect to new rights or warrants (and a termination or expiration of
         the existing rights or warrants, without exercise by the holder
         thereof). In addition, in the event of any distribution (or deemed
         distribution) of rights or warrants, or any Dilution Trigger Event with
         respect thereto, that was counted for purposes of calculating a
         distribution amount for which an adjustment to the Conversion Price
         under this Section 12(d) was made, (1) in the case of any such rights
         or warrants which shall all have been redeemed or repurchased without
         exercise by any holders thereof, the Conversion Price shall be
         readjusted upon such final redemption or repurchase to give effect to
         such distribution or Dilution Trigger Event, as the case may be, as
         though it were a cash distribution, equal to the per share redemption
         or repurchase price received by a holder or holders of Class A Common
         Shares with respect to such rights or warrants (assuming such holder
         had retained such rights or warrants), made to all holders of Class A
         Common Shares as of the date of such redemption or repurchase, and (2)
         in the case of such rights or warrants which shall have expired or been


                                       27
<PAGE>



         terminated without exercise by any holders thereof, the Conversion
         Price shall be readjusted as if such rights and warrants had not been
         issued.

                  Notwithstanding any other provision of this Section 12(d)(iv)
         to the contrary, rights, warrants, evidences of indebtedness, other
         securities, cash or other assets (including, without limitation, any
         rights distributed pursuant to any shareholder rights plan) shall be
         deemed not to have been distributed for purposes of this Section
         12(d)(iv) if the Issuer makes proper provision so that each holder of
         Series A Preferred Shares who converts a Series A Preferred Share (or
         any portion thereof) after the date fixed for determination of
         shareholders entitled to receive such distribution shall be entitled to
         receive upon such conversion, in addition to the Class A Common Shares
         issuable upon such conversion, the amount and kind of such
         distributions that such holder would have been entitled to receive if
         such holder had, immediately prior to such determination date,
         converted such Series A Preferred Share (or portion thereof).

                  For purposes of this Section 12(d)(iv) and Sections 12(d)(i)
         and (ii), any dividend or distribution to which this Section 12(d)(iv)
         is applicable that also includes Class A Common Shares, or rights or
         warrants to subscribe for or purchase Class A Common Shares to which
         Section 12(d)(ii) applies (or both), shall be deemed instead to be (A)
         a dividend or distribution of the evidences of indebtedness, assets,
         shares of capital stock, rights or warrants other than such Class A
         Common Shares or rights or warrants to which Section 12(d)(ii) applies
         (and any Conversion Price reduction required by this Section 12(d)(iv)
         with respect to such dividend or distribution shall then be made)
         immediately followed by (B) a dividend or distribution of such Class A
         Common Shares or such rights or warrants (and any further Conversion
         Price reduction required by Sections 12(d)(i) or 12(d)(ii) with respect
         to such dividend or distribution shall then be made), except that (1)
         the Common Share Record Date of such dividend or distribution shall be
         substituted as "the date fixed for the determination of stockholders
         entitled to receive such dividend or other distribution", "the Common
         Share Record Date fixed for such determination" and "the Common Share
         Record Date" within the meaning of Section 12(d)(i) and as "the date
         fixed for the determination of shareholders entitled to receive such
         rights or warrants", "the Common Share Record Date fixed for the
         determination of the


                                       28
<PAGE>



         shareholders entitled to receive such rights or warrants" and "such
         Common Share Record Date" for purposes of Section 12(d)(ii), and (2)
         any Class A Common Shares included in such dividend or distribution
         shall not be deemed "outstanding at the close of business on the date
         fixed for such determination" for the purposes of Section 12(d)(i).

                  (v) If the Issuer shall, by dividend, repurchase or otherwise,
         distribute to holders of its Class A Common Shares cash (excluding any
         cash that is distributed upon a merger or consolidation to which
         Section 12(e) applies or as part of a distribution referred to in
         Section 12(d)(iv)) in an aggregate amount that, combined together with
         (A) the aggregate amount of any other such distributions to holders of
         its Class A Common Shares made exclusively in cash within the 12 months
         preceding the date of payment of such distribution, and in respect of
         which no adjustment pursuant to this Section 12(d)(v) has been made,
         and (B) the aggregate of any cash plus the fair market value (as
         determined by the Board of Directors, whose determination shall be
         conclusive and described in a resolution of the Board of Directors) of
         consideration payable in respect of any repurchases by the Issuer for
         all or any portion of the Class A Common Shares concluded within the 12
         months preceding the date of payment of such distribution, and in
         respect of which no adjustment pursuant to this Section 12(d)(v) has
         been made, exceeds 10% of the product of the Current Market Price
         (determined as provided in Section 12(d)(v)) times the number of Class
         A Common Shares outstanding on such date, then, and in each such case,
         immediately after the close of business on such date, the Conversion
         Price shall be reduced so that the same shall equal the price
         determined by multiplying the Conversion Price in effect immediately
         prior to the close of business on such date by a fraction (1) the
         numerator of which shall be equal to the Current Market Price on the
         Common Share Record Date for such distribution less an amount equal to
         the quotient of (x) the excess of such combined amount over such 10%
         and (y) the number of Class A Common Shares outstanding on such Common
         Share Record Date and (2) the denominator of which shall be equal to
         the Current Market Price on such Common Share Record Date; provided,
         however, that, if the portion of the cash so distributed applicable to
         one Class A Common Share is equal to or greater than the Current Market
         Price of the Class A Common Shares on such Common Share Record Date, in
         lieu of the foregoing adjustment, adequate

                                       29

<PAGE>


         provision shall be made so that each holder of Series A Preferred
         Shares shall have the right to receive upon conversion of a Series A
         Preferred Share (or any portion thereof) the amount of cash such holder
         would have received had such holder converted such Series A Preferred
         Share (or portion thereof) immediately prior to such Common Share
         Record Date. If such dividend or distribution is not so paid or made,
         the Conversion Price shall again be adjusted to be the Conversion Price
         which would then be in effect if such dividend or distribution had not
         been declared. Any cash distribution to holders of Class A Common
         Shares as to which the Issuer makes the election permitted by Section
         12(d)(x) and as to which the Issuer has complied with the requirements
         of such Section 12(d)(x) shall be treated as not having been made for
         all purposes of this Section 12(d)(v).

                  (vi) For purposes of this Section 12(d), the following terms
         shall have the meaning indicated:

                           "Closing Price" with respect to any securities on any
                  day means the closing price on such day or, if no such sale
                  takes place on such day, the average of the reported high and
                  low prices on such day, in each case on the Nasdaq National
                  Market or the New York Stock Exchange, as applicable, or, if
                  such security is not listed or admitted to trading on such
                  national market or exchange, on the principal national
                  securities exchange or quotation system in the United States
                  on which such security is quoted or listed or admitted to
                  trading, or, if not quoted or listed or admitted to trading on
                  any national securities exchange or quotation system in the
                  United States, the average of the high and low prices of such
                  security on the over-the-counter market on the day in question
                  as reported by the National Quotation Bureau Incorporated or a
                  similar generally accepted reporting service in the United
                  States, or, if not so available, in such manner as furnished
                  by any New York Stock Exchange member firm selected from time
                  to time by the Board of Directors for that purpose, or a price
                  determined in good faith by the Board of Directors, whose
                  determination shall be conclusive and described in a
                  resolution of the Board of Directors.

                           "Common Share Record Date" shall mean, with respect
                  to any dividend, distribution or other transaction or event in
                  which the holders of


                                       30
<PAGE>



                  Class A Common Shares have the right to receive any cash,
                  securities or other property or in which the Class A Common
                  Shares (or other applicable security) is exchanged for or
                  converted into any combination of cash, securities or other
                  property, the date fixed for determination of shareholders
                  entitled to receive such cash, securities or other property
                  (whether such date is fixed by the Board of Directors or by
                  statute, contract or otherwise).

                           "Current Market Price" means, as of any date, the
                  arithmetic average of the Current Market Value of the Class A
                  Common Shares for the ten Trading Days ending on the second
                  Business Day prior to such date. Notwithstanding the
                  foregoing, whenever successive adjustments to the Conversion
                  Price are called for pursuant to this Section 12(d), such
                  adjustments shall be made to the Current Market Price as may
                  be necessary or appropriate to effectuate the intent of this
                  Section 12(d) and to avoid unjust or inequitable results,
                  including such adjustments as may be necessary as a result of
                  the occurrence of one or more "ex" dates during such 10
                  Trading Day period, as determined in good faith by the Board
                  of Directors.

                           "fair market value" shall mean the amount which a
                  willing buyer would pay a willing seller in an arm's-length
                  transaction.

                  (vii) No adjustment in the Conversion Price shall be required
         unless such adjustment would require an increase or decrease of at
         least 1% in such price; provided, however, that any adjustments which
         by reason of this Section 12(d)(vii) are not required to be made shall
         be carried forward and taken into account in any subsequent adjustment.
         All calculations under this Section 12 shall be made by the Issuer and
         shall be made to the nearest cent. No adjustment need be made for a
         change in the par value or no par value of the Class A Common Shares.

                  (viii) Whenever the Conversion Price is adjusted as herein
         provided, the Issuer shall promptly file with the Transfer Agent an
         Officers' Certificate setting forth the Conversion Price after such
         adjustment and setting forth a brief statement of the facts requiring
         such adjustment. Promptly after delivery of such certificate, the
         Issuer shall prepare a notice of such


                                       31
<PAGE>



         adjustment of the Conversion Price setting forth the adjusted
         Conversion Price and the date on which each adjustment becomes
         effective and shall mail such notice of such adjustment of the
         Conversion Price to each holder of Series A Preferred Shares at such
         holder's last address appearing on the register of holders maintained
         for that purpose within 20 days of the effective date of such
         adjustment. Failure to deliver such notice shall not affect the
         legality or validity of any such adjustment.

                  (ix) In any case in which this Section 12(d) provides that an
         adjustment shall become effective immediately after a Common Share
         Record Date for an event, the Issuer may defer until the occurrence of
         such event issuing to the holder of any Series A Preferred Share
         converted after such Common Share Record Date and before the occurrence
         of such event the additional Class A Common Shares issuable upon such
         conversion by reason of the adjustment required by such event over and
         above the Class A Common Shares issuable upon such conversion before
         giving effect to such adjustment.

                  (x) In lieu of making any adjustment to the Conversion Price
         pursuant to Section 12(d)(v), the Issuer may elect to reserve an amount
         of cash for distribution to the holders of Series A Preferred Shares
         upon the conversion of the Series A Preferred Shares so that any such
         holder converting Series A Preferred Shares will receive upon such
         conversion, in addition to the Class A Common Shares and other items to
         which such holder is entitled, the full amount of cash which such
         holder would have received if such holder had, immediately prior to the
         Common Share Record Date for such distribution of cash, converted its
         Series A Preferred Shares into Class A Common Shares, together with any
         interest accrued with respect to such amount, in accordance with this
         Section 12(d)(x). The Issuer may make such election by providing an
         Officers' Certificate to the Transfer Agent to such effect on or prior
         to the payment date for any such distribution and depositing with the
         Transfer Agent on or prior to such date an amount of cash equal to the
         aggregate amount that the holders of Series A Preferred Shares would
         have received if such holders had, immediately prior to the Common
         Share Record Date for such distribution, converted all the Series A
         Preferred Shares into Class A Common Shares. Any such funds so
         deposited by the Issuer with the Transfer Agent shall be invested by
         the Transfer Agent


                                       32
<PAGE>



         in unconditional U.S. Government obligations with a maturity not more
         than three months from the date of issuance. Upon conversion of Series
         A Preferred Shares by a holder thereof, such holder shall be entitled
         to receive, in addition to the Class A Common Shares issuable upon
         conversion, an amount of cash equal to the amount such holder would
         have received if such holder had, immediately prior to the Common Share
         Record Date for such distribution, converted its Series A Preferred
         Shares into Class A Common Shares, along with such holder's pro rata
         share of any accrued interest earned as a consequence of the investment
         of such funds. Promptly after making an election pursuant to this
         Section 12(d)(xi), the Issuer shall give or shall cause to be given
         notice to all holders of Series A Preferred Shares of such election,
         which notice shall state the amount of cash per Series A Preferred
         Share such holders shall be entitled to receive (excluding interest)
         upon conversion of the Series A Preferred Shares as a consequence of
         the Issuer having made such election.

         (e) Subject to Section 13, in case of any consolidation of the Issuer
with, or merger of the Issuer into, any other corporation, or in case of any
merger of another corporation into the Issuer (other than a merger which does
not result in any reclassification, conversion, exchange or cancelation of
outstanding shares of Class A Common Shares of the Issuer), or in case of any
sale, conveyance or transfer of all or substantially all the assets of the
Issuer, the holder of each Series A Preferred Share then outstanding shall have
the right thereafter, during the period such Series A Preferred Share shall be
convertible as specified in Section 12(a), to convert such Series A Preferred
Share only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance or transfer by a holder
of the number of shares of Class A Common Shares of the Issuer into which such
Series A Preferred Share might have been converted immediately prior to such
consolidation, merger, conveyance or transfer, assuming such holder of Class A
Common Shares of the Issuer failed to exercise his rights of election, if any,
as to the kind or amount of securities, cash and other property receivable upon
such consolidation, merger, conveyance or transfer (provided that, if the kind
or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance or transfer is not the same for each Class A
Common Share of the Issuer in respect of which such rights of election shall not
have been exercised ("Nonelecting Share"), then for the purpose of this Section
12 the kind and amount of securities, cash and


                                       33
<PAGE>


other property receivable upon such consolidation, merger, conveyance or
transfer by each Nonelecting Share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Nonelecting Shares). Such securities
shall provide for adjustments which, for events subsequent to the effective date
of the triggering event, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 12. The above provisions of this
Section 12 shall similarly apply to successive consolidations, mergers,
conveyances or transfers.

         (f)  In case:

                           (i) the Issuer shall declare a dividend (or any other
                  distribution) on its Class A Common Shares payable otherwise
                  than in cash out of its earned surplus; or

                           (ii) the Issuer shall authorize the granting to all
                  holders of its Class A Common Shares of rights or warrants to
                  subscribe for or purchase any shares of capital stock of any
                  class or of any other rights; or

                           (iii) of any reclassification of the Class A Common
                  Shares of the Issuer (other than a subdivision or combination
                  of its outstanding Class A Common Shares), or of any
                  consolidation or merger to which the Issuer is a party and for
                  which approval of any shareholders of the Issuer is required,
                  or the sale, conveyance or transfer of all or substantially
                  all the assets of the Issuer; or

                           (iv) of the voluntary or involuntary dissolution,
                  liquidation or winding-up of the Issuer (other than in
                  connection with a sale of all or substantially all of the
                  assets of the Issuer governed by Section 14);

then the Issuer shall cause to be filed with the Transfer Agent and at each
office or agency maintained for the purpose of conversion of Series A Preferred
Shares, and shall cause to be mailed to all holders at their last addresses as
they shall appear in the Series A Preferred Shares Register, at least 20
Business Days (or 10 Business Days in any case specified in clause (i) or (ii)
above) prior to the applicable date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the date
as of


                                       34
<PAGE>



which the holders of Class A Common Shares of record to be entitled to
such dividend, distribution, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective, and the
date as of which it is expected that holders of Class A Common Shares of record
shall be entitled to exchange their Class A Common Shares for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up. Failure to give the
notice required by this Section 12(f) or any defect therein shall not affect the
legality or validity of any dividend, distribution, right, warrant,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up, or the vote upon any such action.

         (g) In addition to the conversion right specified in Section 12(a),
subject to and upon compliance with the provisions of this Certificate, at the
option of the holder thereof a Series A Preferred share may be converted into
Class A Common Shares on the Change of Control Conversion Date specified below
in the circumstances described in the next two paragraphs.

         If the Issuer is prevented under the terms of any applicable debt
instrument from effecting a Change of Control Purchase Offer pursuant to Section
13, the Issuer shall within 30 days following any Change of Control, mail a
notice to each holder of Series A Preferred Shares describing the transaction or
transactions that constitute the Change of Control and offering to convert that
holder's Series A Preferred Shares on the date (the "Change of Control
Conversion Date") specified in that notice (the "Change of Control Conversion
Notice"), which date will be no earlier than 60 days from the date the Change of
Control Conversion Notice is mailed.

         On the Change of Control Conversion Date, the Issuer will convert each
Series A Preferred Share submitted for conversion into that number of Class A
Common Shares which is equal to the number of Class A Common Shares that would
have been payable had a Change of Control Purchase been effected using entirely
Class A Common Shares. To the extent applicable the Issuer will comply with Rule
14e-1 under the Exchange Act and any other applicable securities laws. The
requirements of such laws shall supersede any inconsistent provisions of this
Section 12(g).

         (h) The Issuer shall at all times reserve and keep available, free from
preemptive rights, out of its


                                       35
<PAGE>



authorized but unissued Class A Common Shares, for the purpose of effecting the
conversion of Series A Preferred Shares, the full number of Class A Common
Shares then issuable upon the conversion of all outstanding Series A Preferred
Shares.

         13. Change of Control. (a) If the Issuer experiences a Change of
Control, each holder of Series A Preferred Shares will have the right to require
the Issuer to purchase (a "Change of Control Purchase") all or any part of that
holder's Series A Preferred Shares at a purchase price equal to 100% of the
liquidation preference of those shares, plus all Accumulated Dividends and
unpaid dividends on those shares to the date of purchase. Within 30 days
following any Change of Control, the Issuer will mail a notice to each holder of
Series A Preferred Shares describing the transaction or transactions that
constitute the Change of Control and offer to purchase that holder's Series A
Preferred Shares on the date (the "Change of Control Purchase Date") specified
in that notice (the "Change of Control Offer to Purchase Notice"), which date
will be no earlier than 60 days from the date the Change of Control Purchase
Notice is mailed. The Issuer will also advise holders in each notice of whether
it will pay the change of control purchase price in the form of cash, Class A
Common Shares or a combination thereof.

         The Issuer will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations to the extent those
laws and regulations are applicable in connection with the purchase of preferred
stock as a result of a Change of Control. To the extent that the provisions of
any securities laws or regulations conflict with any of the provisions of this
Section, the Issuer will comply with the applicable securities laws and
regulations and will be deemed not to have breached its obligations under this
section.

         (b) On the date scheduled for payment for the purchase of the Series A
Preferred Shares under this Section, the Issuer will, to the extent lawful, (a)
accept for payment all Series A Preferred Shares properly tendered, (b) deposit
with the Transfer Agent the purchase price of the Series A Preferred Shares so
tendered and (c) deliver or cause to be delivered to the Transfer Agent Series A
Preferred Shares so accepted together with an Officers' Certificate stating the
aggregate liquidation preference of the Series A Preferred Shares being
purchased by the Issuer. The Transfer Agent will promptly mail or deliver to
each holder of Series A Preferred Shares so tendered the applicable payment for
those Series A Preferred Shares, and


                                       36
<PAGE>



the Transfer Agent will promptly countersign and mail or deliver, or cause to be
transferred by book-entry, to each such holder new Series A Preferred Shares
equal in liquidation preference to any unpurchased portion of the Series A
Preferred Shares surrendered, if any. The Issuer will publicly announce the
results of this offer on or as soon as practicable after the payment date for
the purchase of Series A Preferred Shares in connection with a Change of
Control.

         (c) Notwithstanding the foregoing, the Issuer shall not be required to
repurchase any Series A Preferred Shares in connection with a Change of Control
until it has repurchased any and all indebtedness and senior securities that are
required by their terms to be repurchased in connection with such Change of
Control. In addition, the Issuer will not be required to make an offer to
purchase any Series A Preferred Shares upon the occurrence of a Change of
Control if a third party makes that offer in the manner, at the times and
otherwise in compliance with the requirements described in this Section 13 and
purchases all Series A Preferred Shares validly tendered and not withdrawn.

         (d) If the Issuer is prohibited from paying cash upon a Change of
Control under any applicable debt instrument, then, notwithstanding the
provisions of this Section 13, the Issuer shall not be required to effect a
Change of Control Purchase Offer pursuant to this Section 13, but instead shall
be required to offer to effect a Change of Control conversion after pursuant to
Section 12g.

         (e) For purposes of this Section 13, the following terms shall have the
meaning indicated:

         A "Change of Control" means: (i) a "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the ultimate
"beneficial owner" (as defined in Rule 13-d under the Exchange Act) of more than
35% of the total voting power of the Issuer's Voting Stock on a fully diluted
basis and such ownership is greater than the amount of voting power of the
Issuer's Voting Stock, on a fully diluted basis, held by the Existing
Stockholders and their Affiliates on such date; (ii) individuals who on the
Closing Date constitute the Board of Directors (together with any new directors
whose election by the Board of Directors or whose nomination for election by
stockholders was approved by a vote of at least two-thirds of the members of the
Board of Directors then in office who either were members of the Board of
Directors on the Closing Date or whose election or nomination for


                                       37
<PAGE>


election was previously so approved) cease for any reason to constitute a
majority of the members of the Board of Directors then in office; (iii) all the
common stock of RSL Communications PLC is not beneficially owned by the Issuer
(other than directors' qualifying shares) or the Issuer's successor in a
transaction governed by the provisions described in Section 14 or (iv) the
Existing Stockholders as a group acquire, on a cumulative basis after the
Closing Date, directly or indirectly, beneficial ownership of more than (x)
three million additional Class A Common Shares plus (y) 50% of the number of
Class A Common Shares issued by the Issuer in underwritten public offerings
occurring after the Closing Date to persons other than the existing
stockholders, plus (z) the number of Class A Common Shares sold by the Existing
Stockholders in the public markets after the date hereof; this calculation shall
exclude acquisitions from the Issuer or from other Existing Stockholders or from
other officers and directors or Metro Holdings AG of Class A Common Shares owned
by them on the date hereof, including as a result of the conversion of
securities held by the Existing Stockholders on the date hereof; the share
threshold will be appropriately adjusted for stock splits, combinations,
reclassifications and similar transactions.

         "Voting Stock" means Capital Stock which ordinarily has voting power
for the election of directors (or persons performing similar functions), whether
at all times or only so long as no senior class of securities has such voting
power by reason of any contingency.

         "Capital Stock" means any and all shares, interests, participants or
other equivalents (however designated) or corporate stock or other equity
participants, including partnership interests, whether general or limited.

         "Existing Stockholders" means (i) R.S. Lauder, Gaspar & Co., L.P.,
("RSLAG"), (ii) partners in RSLAG and Lauder Gaspar Ventures LLC and their
affiliates, in each case as of the closing of this offering, (iii) Itzhak
Fisher, Ronald S. Lauder, Leonard A. Lauder, Jacob Z. Schuster, Nir Tarlovsky,
Nesim N. Bildirici, and Eugene Sekulow, (iv) family members of any of the
foregoing, (v) trusts, the only beneficiaries of which are persons or entities
described in clauses (i) through (iv) above and (vi) partnerships which are
controlled by the persons or entities described in clauses (i) through (iv)
above.

         "Affiliate" means any persons directly or indirectly controlling or
controlled by or under direct or indirect common control with such person. For
the purposes


                                       38
<PAGE>


of this definition, "control" when used with respect to any person means to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         14. Consolidation, Merger, Conveyance or Transfer. Without the vote or
consent of the holders of a majority of the then Outstanding Series A Preferred
Shares, the Issuer may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, any person unless (a) the entity formed by such consolidation or
merger (if other than the Issuer) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (in any such case,
the "resulting entity") is a corporation organized and existing under the laws
of Bermuda, the United Kingdom, the United States or any State thereof or the
District of Columbia, the British Virgin Islands, Cayman Islands, the
Netherlands, Ireland or Jersey; (b) if the Issuer is not the resulting entity,
the Series A Preferred Shares are converted into or exchanged for and become
shares of such resulting entity ("Replacement Preferred Shares"), having in
respect of such resulting entity the same (or more favorable) powers,
preferences and relative, participating, optional or other special rights that
the Series A Preferred Shares had immediately prior to such transaction; (c)
immediately after giving effect to such transaction, no Voting Rights Triggering
Event has occurred and is continuing and (d) the Issuer shall have delivered to
the Transfer Agent an Officers' Certificate and an opinion of counsel, each
stating that such consolidation, merger, conveyance or transfer complies with
this Section 13 and that all conditions precedent herein provided for relating
to such transaction have been complied with.

         The resulting entity of such transaction shall thereafter be deemed to
be the "Issuer" for all purposes of this Certificate and the predecessor shall
be relieved of all obligations with respect to the Series A Preferred Shares.

         15. SEC Reports; Reports by Issuer. So long as any Series A Preferred
Shares are outstanding, the Issuer shall file with the SEC and, within 15 days
after it files them with the SEC, with the Transfer Agent and, if requested,
furnish to the holders of Series A Preferred Shares all annual and quarterly
reports and the information, documents, and other reports that the Issuer is
required to file with the SEC pursuant to Section 13(a) or 15(d) of the


                                       39
<PAGE>


Exchange Act ("SEC Reports"). In the event the Issuer is not required or shall
cease to be required to file SEC Reports, pursuant to the Exchange Act, the
Issuer will nevertheless file such reports with the SEC (unless the SEC will not
accept such a filing). Whether or not required by the Exchange Act to file SEC
Reports with the SEC, so long as any Series A Preferred Shares are Outstanding,
the Issuer will furnish or cause to be furnished copies of the SEC Reports to
the Transfer Agent at the time the Issuer is required to make such information
available to the Transfer Agent, to holders of Series A Preferred Shares and to
prospective investors who request it in writing. In addition, the Issuer has
agreed that, for so long as any Series A Preferred Shares remain outstanding, if
the Issuer is required pursuant to Rule 144A(d)(4) under the Securities Act, it
will furnish to the holders and to securities analysts and prospective
investors, upon their reasonable request, the information required to be
delivered pursuant to Rule 144A(d)(4) under Securities Act.



                                       40
<PAGE>


         16. Definitions. For purposes of this Certificate, the following terms
shall have the meaning set forth below:

         "Accumulated Dividends" has the meaning set forth in Section 3.

         "Additional Amounts" has the meaning set forth in Section 6(c).

         "Agent Members" has the meaning set forth in Section 4(c).

         "Applicable Jurisdiction" has the meaning set forth in Section 6(c).

         "Affiliate" has the meaning set forth in Section 13(d).

         "Average Market Value" of the Class A Common Shares means (a) with
respect to the payment of any dividends, including regular dividends, Special
Dividends and Additional Amounts, the arithmetic average of the Current Market
Value (as defined below) of the Class A Common Shares for the five Trading Days
ending on the second Business Day prior to the Dividend Record Date for such
dividend, (b) with respect to any Optional Redemption or Tax Redemption, the
arithmetic average of the Current Market Value of the Class A Common Shares for
the ten Trading Days beginning on the Trading Day following the Redemption
Effective Date and (c) with respect to Mandatory Redemption, offers to purchase
pursuant to Section 13 or any other payment, the arithmetic average of the
Current Market Value of the Class A Common Shares for the ten Trading Days
ending on the second Business Day prior to the date of such payment.

         "Bonus Shares" has the meaning set forth in Section 11.

         "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to be closed.

         "Bye-Laws" has the meaning set forth in the Recitals.

         "Capital Stock" has the meaning set forth in 13(d).



                                       41
<PAGE>



         "Change of Control" has the meaning set forth in Section 13(d).

         "Change of Control Conversion Date" has the meaning set forth in
Section 12(g).

         "Change of Control Conversion Notice" has the meaning set forth in
Section 12(g).

         "Change of Control Purchase" has the meaning set forth in Section
13(a).

         "Change of Control Purchase Date" has the meaning set forth in Section
13(a).

         "Change of Control Offer to Purchase Notice" has the meaning set forth
in Section 13(a).

         "Class A Common Shares" means the Class A Common shares, par value
U.S.$.00457 per share.

         "Closing Date" means any Closing Date under the Purchase Agreement.

         "Closing Price" has the meaning set forth in Section 12(d)(vi).

         "Common Share Record Date" has the meaning set forth in Section
12(d)(vi).

         "Companies Act" has the meaning set forth in Section 11(a).

         "Conversion Agent" has the meaning set forth in Section 5(a).

         "Conversion Price" has the meaning set forth in Section 12(a).

         "Conversion Rate" has the meaning set forth in Section 12(a).

         "Current Market Value" of the Class A Common Shares means (a) if the
shares are traded on the Nasdaq Stock Market, or its successor, the last sale
price, or if there is no last sale price, the average of the last reported bid
and asked prices, as reported by the Nasdaq Stock Market, or its successor, as
of the close of regular trading for that Trading Day and (b) if the shares are
traded on the New York Stock Exchange or another national securities exchange,
the Closing Price as reported on the


                                       42
<PAGE>



NYSE Composite Transactions Tape, or any comparable exchange reporting service,
as of the close of regular trading on such exchange for that Trading Day.

         "Current Market Price" has the meaning set forth in Section 12(d)(vii).

         "Depositary" has the meaning set forth in Section 4(b).

         "Dilution Trigger Event" has the meaning set forth in Section
12(d)(iv).

         "Distributed Securities" has the meaning set forth in Section
12(d)(iv).

         "Dividend Payment Date" means each February 1, May 1, August 1 and
November 1; provided, however, that if such date shall not be a Business Day,
then such date shall be the next Business Day.

         "Dividend Record Date" has the meaning set forth in Section 7(a).

         "DTC" has the meaning set forth in Section 4(b).

         "Exchange Act" has the meaning set forth in Section 4(d).

         "Existing Stockholders" has the meaning set forth in Section 13(d).

         "Expiration Time" has the meaning set forth in Section 12(d)(vi).

         "fair market value" has the meaning set forth in Section 12(d)(vii).

         "Global Series A Preferred Share" has the meaning set forth in Section
4(b).

         "Global Shares Legend" has the meaning set forth in Section 4(b).

         "Initial Purchasers" means Goldman, Sachs & Co.; Lehman Brothers Inc.;
Merrill Lynch, Pierce, Fenner & Smith; and Morgan Stanley & Co. Incorporated.

         "Issuer" means the Person named as the "Issuer" in the Recitals until a
successor Person shall have become such


                                       43
<PAGE>



pursuant to Section 14 and thereafter "Issuer" shall mean such successor Person.

         "Issuer Order" means a written request or order signed in the name of
the Issuer by its Chairman of the Board, its President or a Vice President and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary.

         "Junior Shares" has the meaning set forth in Section 9(a).

         "liquidation preference" has the meaning set forth in Section 3.

         "Mandatory Redemption Date" has the meaning set forth in Section 10(d);
provided, however, that if such date shall not be a Business Day, then such date
shall be the next Business Day.

         "Memorandum of Association" has the meaning set forth in the Recitals.

         "Nonelecting Share" has the meaning set forth in Section 12(e).

         "Officers' Certificate" means a certificate of the Issuer signed in the
name of the Issuer by its Chairman of the Board, its Chief Executive Officer,
its President, its Chief Operating Officer, its Chief Financial Officer or a
Vice President and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary.

         "Optional Redemption" has the meaning set forth in Section 10(a).

         "Optional Redemption Date" has the meaning set forth in Section 10(a).

         "Outstanding" means when used with respect to Series A Preferred Shares
means, as of the date of determination, all Series A Preferred Shares
theretofore authenticated and delivered under this Certificate, except (a)
Series A Preferred Shares theretofore converted into Class A Common Shares in
accordance with Section 12 and Series A Preferred Shares theretofore canceled by
the Transfer Agent or delivered to the Transfer Agent for cancelation; (b)
Series A Preferred Shares for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Transfer Agent or any Paying
Agent (other than the Issuer) in trust or set aside and


                                       44
<PAGE>


segregated in trust by the Issuer (if the Issuer shall act as its own Paying
Agent) for the holders of such Series A Preferred Shares; provided that, if such
Series A Preferred Shares are to be redeemed, notice of such redemption has been
duly given pursuant to this Certificate or provision therefor satisfactory to
the Transfer Agent has been made; and (c) Series A Preferred Shares (x) that are
mutilated, destroyed, lost or stolen which the Issuer has decided to pay or (y)
in exchange for or in lieu of which other Series A Preferred Shares have been
authenticated and delivered pursuant to this Certificate; provided, however,
that, in determining whether the holders of the Series A Preferred Shares have
given any request, demand, authorization, direction, notice, consent or waiver
or taken any other action hereunder, Series A Preferred Shares owned by the
Issuer or any other obligor upon the Series A Preferred Shares or any Affiliate
of the Issuer or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Transfer Agent shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Series A Preferred Shares which
the Transfer Agent has actual knowledge of being so owned shall be so
disregarded. Series A Preferred Shares so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Transfer Agent the pledgee's right so to act with respect to
such Series A Preferred Shares and that the pledgee is not the Issuer or any
other obligor upon the Series A Preferred Shares or any Affiliate of the Issuer
or of such other obligor.

         "Parity Shares" has the meaning set forth in Section 9(a).

         "Paying Agent" has the meaning set forth in Section 5(a).

         "Persons" means, etc.

         "Purchase Agreement" means the Purchase Agreement dated February 14,
2000, between the Issuer, and the Initial Purchasers.

         "Purchased Shares" has the meaning set forth in Section 12(d)(vi).

         "QIBs" has the meaning set forth in Section 4(a).

         "Redemption Date" means (a) with respect to any Mandatory Redemption,
the Mandatory Redemption Date,


                                       45
<PAGE>


(b) with respect to any Optional Redemption or Tax Redemptions, (x) to the
extent the Redemption Price is to be paid in cash, the Redemption Effective Date
with respect thereto, and (y) to the extent the Redemption Price is to be paid
in Class A Common Shares, the 12th Trading Day after such Redemption Effective
Date.

         "Redemption Effective Date" has the meaning set forth in Section 10(a).

         "Redemption Notice" has the meaning set forth in Section 10(g).

         "Redemption Price" has the meaning set forth in Section 10(g).

         "Registrable Securities" has the meaning set forth in Section 5(c).

         "Registration Default" has the meaning set forth in Section 6(b).

         "Registration Rights Agreement" means the Registration Rights Agreement
dated as of February 22, 2000, between the Issuer and the Initial Purchasers.

         "Replacement Preferred Shares" has the meaning set forth in Section 14.

         "Restricted Definitive Securities" has the meaning set forth in Section
4(f).

         "Restricted Shares Legend" has the meaning set forth in Section 4(a).

         "resulting entity" has the meaning set forth in Section 14.

         "Rule 144A" has the meaning set forth in Section 4(a).

         "SEC" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the adoption of this Certificate such commission is not existing
and performing the duties now assigned to it, then the body performing such
duties at such time.

         "SEC Reports" has the meaning set forth in Section 15.



                                       46
<PAGE>


         "Securities Act" has the meaning set forth in Section 4(a).

         "Senior Shares" has the meaning set forth in Section 9(a).

         "Series A Preferred Share Directors" has the meaning set forth in
Section 8(a).

         "Series A Preferred Shares" has the meaning set forth in Section 1.

         "Shelf Registration Statement" means the shelf registration statement
in respect of the Transfer Restricted Securities required pursuant to the
Registration Rights Agreement to be filed with the SEC with respect to resales
of the Transfer Restricted Securities.

         "Special Dividends" has the meaning set forth in Section 6(b).

         "Tax Redemption" has the meaning set forth in Section 10(b).

         "Trading Day" means a day when the principal securities market on which
the relevant securities trade is open for business.

         "Transfer Agent" has the meaning set forth in Section 3.

         "Transfer Restricted Securities" means each Series A Preferred Share
and Class A Common Share issuable upon conversion of Series A Preferred Shares
or in satisfaction of any dividend or other payment on Series A Preferred Shares
until (a) the date on which such security has been effectively registered under
the Securities Act and disposed of in accordance with the Shelf Registration
Statement or (b) the date on which such security is distributed to the public
pursuant to Rule 144 under the Securities Act or may be distributed to the
public pursuant to Rule 144(k) under the Securities Act.

         "Voting Stock" has the meaning set forth in Section 13(d).



                                       47
<PAGE>



                                                    [CERTIFICATE OF DESIGNATION]



         IN WITNESS WHEREOF, the Issuer has caused this Certificate to be duly
executed as of the date hereof.


                                              RSL COMMUNICATIONS, LTD.


                                              by: /s/ Itzhak Fisher
                                                 -------------------------------
                                                  Name:
                                                  Title:


ATTEST:


by: /s/ Avery S.Fischer
   ----------------------------
   Name:
   Title:


<PAGE>


                                                                       EXHIBIT A


                                FACE OF SECURITY

[Restricted Shares Legend (include if Security is not registered under the U.S.
Securities Act of 1933): THE SERIES A PREFERRED SHARES EVIDENCED HEREBY (AND (1)
THE CLASS A COMMON SHARES ISSUABLE UPON CONVERSION OF THE SERIES A PREFERRED
SHARES AND (2) THE CLASS A COMMON SHARES ISSUABLE IN PAYMENT OF DIVIDENDS OR OF
THE REDEMPTION OR PURCHASE PRICE) HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) IN THE CASE OF THE SERIES
A PREFERRED SHARES, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH ABOVE.

[Global Shares Legend (include if Security is issued as a global certificate):
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

                  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE CERTIFICATE OF DESIGNATION REFERRED TO BELOW.

      IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND
TRANSFER AGENT MAY


<PAGE>



REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.]









                                       2
<PAGE>




                                                                Number of Shares
Number: ____                                                         ____ Shares

                                                     144A CUSIP NO.:
                                                      IAI CUSIP NO.:


                  Series A 7-1/2% Convertible Preferred Shares

                                       of

                            RSL COMMUNICATIONS, LTD.


                  RSL COMMUNICATIONS, LTD., an exempted company organized under
the laws of Bermuda (the "Issuer", which term includes any successor Person
under the Certificate of Designation hereinafter referred to) hereby certifies
that [HOLDER] (the "Holder") is the registered owner of fully paid and
non-assessable preferred securities of the Issuer designated the Series A 7 1/2%
Convertible Preferred Shares, par value U.S.$0.00457 and liquidation preference
U.S.$50.00 per share (the "Preferred Shares"). The Preferred Shares are
transferable on the books and records of the Transfer Agent, in person or by a
duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Shares represented
hereby are issued and shall in all respects be subject to the provisions of the
Certificate of Designation dated February 14, 2000, as the same may be amended
from time to time in accordance with its terms (the "Certificate of
Designation"). Capitalized terms used herein but not defined shall have the
meaning given them in the Certificate of Designation. The Issuer will provide a
copy of the Certificate of Designation to a Holder without charge upon written
request to the Issuer at its principal place of business.

                  Reference is hereby made to select provisions of the Preferred
Shares set forth on the reverse hereof, and to the Certificate of Designation,
which select provisions and the Certificate of Designation shall for all
purposes have the same effect as if set forth at this place.

                  Upon receipt of this certificate, the Holder is bound by the
Certificate of Designation and is entitled to the benefits thereunder.



                                       3
<PAGE>



                  Unless the Transfer Agent's valid countersignature appears
hereon, the Preferred Shares evidenced hereby shall not be entitled to any
benefit under the Certificate of Designation or be valid or obligatory for any
purpose.



                                       4
<PAGE>



                  IN WITNESS WHEREOF, the Issuer has executed this certificate
as of the date set forth below.


                                    RSL COMMUNICATIONS, LTD.,


                                    By:_____________________________
                                       Name:
                                       Title:

[Seal]

                                    By:______________________________
                                       Name:
                                       Title:

                                    Dated:


COUNTERSIGNED AND REGISTERED

AMERICAN STOCK TRANSFER & TRUST COMPANY
as Registrar and Transfer Agent,


By:  ________________________________
     Authorized Signatory

Dated:



                                       5
<PAGE>



                               REVERSE OF SECURITY

                            RSL COMMUNICATIONS, LTD.

                  Series A 7-1/2% Convertible Preferred Shares

                  Dividends on each Preferred Share shall be payable at a rate
per annum set forth in the face hereof or as provided in the Certificate of
Designation (including Special Dividends). Dividends may be paid, at the option
of the Issuer, in cash, or, subject to certain limitations, in Class A Common
Shares of the Issuer or a combination of cash and Class A Common Shares of the
Issuer.

                  The Preferred Shares shall be redeemable as provided in the
Certificate of Designation. The Preferred Shares shall be convertible into the
Issuer's Class A Common Shares in the manner and according to the terms set
forth in the Certificate of Designation.

                  Generally, when a successor Person issues replacement
preferred shares upon conversion of, or in exchange for, the Series A Preferred
Shares in a transaction governed by Section 14 of the Certificate of
Designation, the predecessor Person will be released from any obligation on the
Series A Preferred Shares, except as provided in Section 9(d) of the Certificate
of Designation.




                                       6
<PAGE>


                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers the Preferred
Shares evidenced hereby to:-----------------------------------------------------

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

--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)

and irrevocably appoints:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
agent to transfer the Preferred Shares evidenced hereby on the books of the
Registrar and Transfer Agent. The agent may substitute another to act for him or
her.

Date:---------------------------------------------------------------------------

Signature: ______________________________
(Sign exactly as your name appears on the other side of this Convertible
Preferred Share Certificate)

Signature Guarantee:______________________________


--------
*Signature must be guaranteed by an "eligible guarantor institution" (i.e., a
bank, stockbroker, savings and loan association or credit union) meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.




                                       7
<PAGE>



                              NOTICE OF CONVERSION]

                    (To be Executed by the Registered Holder
                    in order to Convert the Preferred Stock)


The undersigned hereby irrevocably elects to convert (the "Conversion")
_________ Series A 7-1/2% Convertible Preferred Shares (the "Preferred Shares"),
represented by stock certificate No(s). (the "Preferred Share Certificates")
into shares of common stock, par value U.S.$0.00457 per share ("Class A Common
Shares"), of RSL Communications, Ltd. (the "Issuer") according to the conditions
of the Certificate of Designation establishing the terms of the Preferred Stock
(the "Certificate of Designation"). If shares are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates. No
fee will be charged to the holder for any conversion, except for transfer taxes,
if any. Each Preferred Share Certificate is attached hereto (or evidence of
loss, theft or destruction thereof).*

The undersigned represents and warrants that all offers and sales by the
undersigned of Class A Common Shares issuable to the undersigned upon conversion
of the Preferred Shares shall be made pursuant to registration of the Class A
Common Shares under the Securities Act of 1933 (the "Act"), or pursuant to any
exemption from registration under the Act.

Any holder, upon the exercise of its conversion rights in accordance with the
terms of the Certificate of Designation and the Preferred Shares, agrees to be
bound by the terms of the Registration Rights Agreement.

Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in or pursuant to the Certificate of Designation.


                              Date:___________________________________

                              Applicable Conversion Price:____________

                              Number of Preferred Shares
                              to be Converted:________________________

                              Number of Class A Common Shares
                              to be Issued:___________________________



<PAGE>



                              Signature:______________________________

                              Name:___________________________________

                              Address:**______________________________

                              Fax No.:________________________________


*The Issuer is not required to issue Class A Common Shares until the original
Preferred Share Certificate(s) (or evidence of loss, theft or destruction
thereof) to be converted are received by the Issuer or its Transfer Agent. The
Issuer shall issue and deliver Class A Common Shares to an overnight courier not
later than three Business Days following receipt of the original Preferred Share
Certificate(s) to be converted.

**Address where Class A Common Shares and any other payments or certificates
shall be sent by the Issuer.



                                       2
<PAGE>



[Global Share Schedule: (include if Security is issued as a global certificate)]

                                                                      SCHEDULE A


                    SCHEDULE OF EXCHANGES FOR GLOBAL SECURITY

                  The initial number of Series A Preferred Shares represented by
this Global Series A Preferred Share shall be _______. The following exchanges
of a part of this Global Series A Preferred Share have been made:

<TABLE>
<CAPTION>


----------------------- -------------------- -------------------- -------------------- --------------------
                                                                    Number of shares
                         Amount of decrease    Amount of increase   represented by
                             in number of          in number of    this Global Series
                          shares represented   shares represented   A Preferred Share
                           by this Global        by this Global      following such          Signature of
                         Series A Preferred    Series A Preferred      decrease or        authorized officer
   Date of Exchange            Share                 Share              increase             of Registrar
----------------------- -------------------- -------------------- -------------------- --------------------
<S>                     <C>                  <C>                  <C>                  <C>
----------------------- -------------------- -------------------- -------------------- --------------------

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

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

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

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

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

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

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

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

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

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

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

----------------------- -------------------- -------------------- -------------------- --------------------
</TABLE>


                                       3

<PAGE>


                                                                       EXHIBIT B


                          FORM OF TRANSFER CERTIFICATE

            (Transfers pursuant toss. 5(b)(ii) of the Certificate of
                  Designation of the Series A Preferred Shares)


American Stock Transfer & Trust Company, as Transfer Agent
40 Wall Street
New York, New York 10005

Att: Stock Transfer
     Administration

Re:  RSL Communications, Ltd.
     7-1/2% Series A Convertible Preferred Shares due 2012 (the
     "Series A Preferred Shares")

                  Reference is hereby made to the Certificate of Designation of
the Series A Preferred Shares. Capitalized terms used but not defined herein
shall have the meanings given them in the Schedule.

                  This letter relates to __________ Series A Preferred Shares
(the "Securities") which are represented by Restricted Definitive Securities
(CUSIP No. __) held in the name of [name of transferor] (the "Transferor") to
effect the transfer of the Securities.

                  In connection with such request, and in respect of the
Securities, the Transferor does hereby certify the Securities are being
transferred (i) in accordance with applicable securities laws of any state of
the United States or any other jurisdiction and (ii) in accordance with their
terms:

CHECK ONE BOX BELOW:

         (1) [ ]  to a transferee that the Transferor reasonably believes is a
                  qualified institutional buyer within the meaning of Rule 144A
                  under the Securities Act purchasing for its own account or for
                  the account of a qualified institutional buyer in a
                  transaction meeting the requirements of Rule 144A;

         (2) [ ]  to a transferee that the Transferor reasonably believes is
                  an institutional "accredited investor" as defined in Rule
                  501(a)(1), (2), (3) or (7) under the Securities Act that is
                  acquiring such Securities for investment purposes and not for
                  distribution and is acquiring at least $250,000 aggregate
                  liquidation preference of

<PAGE>


                  Series A Preferred Shares for its own account or for one or
                  more accounts (each of which is acquiring at least $250,000
                  aggregate liquidation preference) as to which the transferee
                  exercises sole investment discretion; or

         (3) [ ]  pursuant to an exemption from registration under the
                  Securities Act provided by Rule 144 thereunder (if available).


                                       [Name of Transferor]

                                        by: ________________________
                                            Name:
                                            Title:

Dated:


cc:  RSL Communications, Ltd.
     767 Fifth Avenue
     Suite 4300
     New York, NY 10153


                                       2


<PAGE>


                                                                       EXHIBIT C

               FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE

             (Transfers pursuant toss. 5(b)(ii) of the Certificate)



American Stock Transfer & Trust Company, as Transfer Agent
40 Wall Street
New York, NY 10005

Att: Stock Transfer
     Administration

Re:  RSL Communications, Ltd.
     7-1/2% Series A Convertible Preferred Shares due 2012
     (the "Series A Preferred Shares")

                  Reference is hereby made to the Certificate of Designation of
the Series A Preferred Shares. Capitalized terms used but not defined herein
shall have the meanings given them in the Certificate.

                  This letter relates to ________ Series A Preferred Shares (the
"Securities") which are represented by the Restricted Definitive Securities
(CUSIP No. ___) held in the name of [name of transferor] (the "Transferor"), and
is given in connection with the transfer of the Securities to the undersigned.

                  In connection with such request, and in respect of the
Securities, we confirm that:

                  1. We understand that the Securities have not been registered
under the U.S. Securities Act of 1933 (the "Securities Act"), and are being sold
to us in a transaction that is exempt from the registration requirements of the
Securities Act.

                  2. We are a corporation, partnership or other entity (other
than a natural person) having such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities, and we are (or any account for which we are
purchasing under paragraph 4 below is) an accredited investor as defined in Rule
501(a) under the Securities Act, able to bear the economic risk of the proposed
investment in the Securities.


<PAGE>


                  3. We are acquiring the Securities for our own account (or for
accounts as to which we exercise sole investment discretion and have authority
to make, and do make, the statements contained in this letter) and not with a
view to any distribution of the Securities, subject, nevertheless, to the
understanding that the disposition of our property shall at all times be and
remain within our control.

                  4. We are, and each account (if any) for which we are
purchasing Securities is, purchasing Securities having an aggregate liquidation
preference of not less than $250,000.

                  5. We understand that (a) the Securities will be delivered to
us in registered form only and that the certificate delivered with respect to
the Securities will bear a legend substantially to the following effect:

         THE SERIES A PREFERRED SHARES EVIDENCED HEREBY (AND (1) THE CLASS A
         COMMON SHARES ISSUABLE UPON CONVERSION OF THE SERIES A PREFERRED SHARES
         AND (2) THE CLASS A COMMON SHARES ISSUABLE IN PAYMENT OF DIVIDENDS OR
         OF THE REDEMPTION OR PURCHASE PRICE) HAVE NOT BEEN REGISTERED UNDER THE
         UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT
         BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) IN
         THE CASE OF THE SERIES A PREFERRED SHARES, TO A PERSON WHO THE SELLER
         REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
         MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
         ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
         TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) TO AN
         INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
         REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (3) PURSUANT TO AN
         EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
         144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE
         REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE
         WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES
         AND OTHER JURISDICTIONS. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
         REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
         HEREBY OF THE RESALE RESTRICTIONS SET FORTH ABOVE. THE HOLDER WILL, AND
         EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
         THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
         ABOVE.



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<PAGE>


                  and (b) such certificates will be reissued without the
foregoing legend only in accordance with the terms of the Certificate.

                  6. We agree that in the event that at some future time we wish
to dispose of any of the Securities, we will not do so unless:

                  (a) the Securities are sold to the Issuer;

                  (b) the Securities are sold to a qualified institutional buyer
in compliance with Rule 144A under the Securities Act;

                  (c) the Securities are sold to an institutional accredited
         investor, as defined in Rule 501(a) under the Securities Act, acquiring
         at least $250,000 liquidation preference of the Securities that, prior
         to such transfer, furnishes to the Transfer Agent a signed letter
         containing certain representations and agreements relating to the
         restrictions on transfer of the Securities (the form of which letter
         can be obtained from such Transfer Agent);

                  (d) the Securities are sold by us pursuant to Rule 144 under
the Securities Act; or


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<PAGE>



                  (e) the Securities are sold pursuant to an effective
registration statement under the Securities Act.

                                   Very truly yours,

                                   [PURCHASER]


                                   by: __________________________
                                       Name:
                                       Title:

Dated:


cc:  RSL Communications, Ltd.
     767 Fifth Avenue
     Suite 4300
     New York, NY 10153

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