CERTIFICATE OF DESIGNATIONS
                                       OF
                                 CNE GROUP, INC.
                       ADOPTED PURSUANT TO SECTION 151(G)
                                     OF THE
                        DELAWARE GENERAL CORPORATION LAW



     RESOLVED, that pursuant to the authority expressly granted to the Board of
Directors (the "Board of Directors") of CNE Group, Inc., a Delaware Corporation
(the "Company"), by the provisions of the Amended and Restated Certificate of
Incorporation of the Company and the provisions of Section 151(g) of the
Delaware General Corporation Law, the Board of Directors hereby creates a series
of preferred stock, par value $0.00001 per share, and determines the designation
and number of shares of Series AA Preferred Stock which constitute such series
and the relative rights, preferences and limitations of such series as follows:

     1. Designation and Number of Series AA Preferred Stock. The series of
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Preferred Stock shall be designated as "Series AA Preferred Stock" (hereinafter
called the "Series AA Preferred Stock") and shall consist of a total of
2,000,000 shares of Series AA Preferred Stock, par value $0.00001 per share.

     2. Dividends. The holders of Series AA Preferred Stock shall be entitled to
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receive a cumulative dividend equal to 8% of the Liquidating Preference on an
annual basis, payable quarterly in cash commencing on January 1, 2004.

     3. Liquidation Preference.
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        (a) In the event of any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, the holders of the Series AA Preferred
Stock shall be entitled to receive, prior and in preference to any distribution
of any remaining assets of the Company to the holders of Common Stock and any
other Preferred Stock not then equal to senior to the Series AA Preferred Stock,
by reason of their ownership thereof, an amount equal to $1.00 for each
outstanding share of Series AA Preferred Stock (the "Liquidating Preference").
If, upon the occurrence of the liquidation, dissolution or winding up of the
Company, the assets and funds thereof distributed to the holders of the Series
AA Preferred Stock shall be insufficient to permit the payment to such holders
in full of the Liquidating Preference, then the entire assets and funds of the
Company legally available for distribution shall be distributed ratably among
the holders of the Series AA Preferred Stock and any Preferred Stock equal to
the Series AA Preferred Stock in proportion to the amount of Preferred Stock
held by each.

        (b) In the event of a liquidation as described above, all non-cash
assets of the Company shall be valued as follows:

            (i) Securities not subject to legend, investment letter or other
similar restrictions on free marketability:



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            (A) If traded on a recognized securities exchange, the value shall
be deemed to be the average of the closing prices of the securities on such
exchange over the thirty day period ending three days prior to the closing;

            (B) If actively traded over-the-counter, the value shall be deemed
to be the average of the closing bid or sale prices (whichever is applicable)
over the thirty day period ending three days prior to the closing; and

            (C) If there is no active public market, the value shall be the fair
market value thereof, as determined by the Company's Board of Directors, which
determination shall be final absent fraud or manifest error.

        (ii) Securities subject to legend, investment letter or other similar
restrictions shall be valued by an appropriate discount from the market value as
determined in accordance with subsection (i) (C) above.

     4. Redemption. The holders of the Series AA Preferred Stock shall have no
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right of redemption. The Company, subject to and in compliance with the
provisions hereof, shall have the right, but not the obligation, to redeem all
or any portion of the Series AA Preferred Stock in an amount equal to the
Liquidating Preference plus any dividends accrued but unpaid as of the date of
redemption (i) at any time for cash, and/or (ii) after April 30, 2008 and before
October 31, 2008 (the "Redemption Period"), for such number of shares of Common
Stock ("the Redemption Shares") as shall equal the quotient obtained by dividing
(x) the Liquidating Preference of the Series AA Preferred Stock and any then
accrued and unpaid dividends by (y) the Applicable Redemption Rate(as
hereinafter determined), upon surrender of the Series AA Preferred Stock by the
holder thereof to the Company. For purposes hereof the term "Applicable
Redemption Rate" shall be the average of the daily closing bid prices (each such
price is referred to individually as a "Floating Reference Price" and,
collectively, as the "Floating Reference Prices") during the 30 trading days
immediately preceding the date on which Company gives the holder of the Series
AA Preferred Stock written notice its election to redeem his Series AA Preferred
Stock for the Redemption Shares as provided herein. The closing bid price on any
trading day shall be (a) if the Common Stock is then listed or quoted on either
the American Stock Exchange or other national exchange, the NASDAQ SmallCap
Market or the NASDAQ National Market, the reported closing bid price for the
Common Stock as reported by Bloomberg, L.P. or The Wall Street Journal on such
day (or, if not so reported but the Common Stock is quoted in the
over-the-counter market bulletin board or the pink sheets, the last reported bid
price thereof on such date). If the price of the Common Stock cannot be
calculated on such date on any of the foregoing bases, such price on such date
shall be determined by Company's Board of Directors, which amount shall be
conclusive absent fraud or manifest error. "Trading day" shall mean any day on
which the Company's Common Stock is traded for any period on the principal
securities exchange or other securities market on which the Common Stock is then
being traded. Not withstanding anything to the contrary set forth above, the
Applicable Redemption Rate shall not be less than $1.00 per share unless the
reduction in value is due to adjustments set forth in the next succeeding
sentence. In case of any consolidation of the Company with, or merger of the
Company with, or into, another corporation (other than a consolidation or merger
that does not result in any reclassification or change of the outstanding Common
Stock), the corporation formed by such consolidation or merger shall execute and
deliver to each holder of shares of Series AA Preferred Stock a supplemental
redemption



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agreement providing that the holder shall have the right thereafter to receive,
upon redemption of his Series AA Preferred Stock for Redemption Shares, the kind
and amount of shares of stock and other securities and property receivable upon
such consolidation or merger, by the holder of the number of shares of his
Redemption Shares for which he might have redeemed his Series AA Preferred Stock
immediately prior to such consolidation or merger and such supplemental
redemption agreement shall provide for adjustments that shall be identical to
the adjustments provided in this Paragraph 4. To the extent that the Company
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shall not have redeemed shares of Series AA Preferred Stock at the termination
of the Redemption Period, the Series AA Preferred Stock then remaining
outstanding shall thereafter bear a 12% cumulative dividend, payable quarterly
in cash. In the event that the Company shall fail to pay two consecutive
quarterly dividends (a "Dividend Payment Failure"), the holders of a majority of
the then outstanding shares of Series AA Preferred Stock shall have the right to
elect the majority of the Company's directors until the Dividend Payment Failure
shall have been cured. If, during the period prior to the Company curing a
Dividend Payment Failure, the holders of the Company's Series A Preferred Stock
(the "A Preferred Stock") and/or Series C Preferred Stock (the "C Preferred
Stock") and/or Series E Preferred Stock (the "E Preferred Stock") shall obtain
the right to elect the majority of the Company's directors as the result of a
Dividend Payment Failure as defined in the Certificates of Designations for the
A, C and/or E Preferred Stock, as the case may be, then the holders of a
majority of the shares of the Series AA Preferred Stock and/or Series A
Preferred Stock and/or C Preferred Stock and/or E Preferred Stock, as the case
may be, shall have the right, voting as a single class, to elect the majority of
the Company's directors until the Dividend Payment Failure of the applicable
Series of Preferred Stock shall have been paid. By way of example, if the
holders of the Series AA, A, C and E Preferred Stock shall have obtained the
right to vote as provided herein pursuant to a Dividend Payment Failure and the
Dividend Payment Failure of one Series is subsequently cured but the Dividend
Payment Failure of the other Series shall not have been cured, only the Series
whose Dividend Payment Failure have not been cured shall retain the right to
elect the majority of the Company's directors. If the Company redeems less than
all of the outstanding shares of Series AA Preferred Stock as provided in this
Section 4, then such redemption shall be made on a pro rata basis. The Company
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shall remit the appropriate amount of cash or issue the appropriate number of
Redemption Shares, as the case may be, to each holder of the Series AA Preferred
Stock whose shares are to be redeemed upon receipt of such holder's certificate
representing the shares of the Series AA Preferred Stock to be redeemed. After
the Redemption Date, all shares of Series AA Preferred Stock redeemed as
provided herein shall cease to exist and the holders thereof shall have only the
right to receive the cash or the Redemption Shares payable or issuable to them,
as the case may be, for the redemption of their Series AA Preferred Stock. The
Company shall deliver the certificates representing the Redemption Shares a
holder whose shares are to be redeemed within 15 business days after it has
notified the holder of its intent to redeem his Series AA Preferred Stock for
Redemption Shares, against delivery by him of his Stock to the Company. In the
event that less than all of a holder's Series AA Preferred Stock shall be
redeemed as provided herein, in addition to the cash or certificates
representing the Redeemed Shares, as the case may be, the Company shall deliver
to such holder a new Series AA Preferred Stock certificate with the same terms
and conditions of this Series AA Preferred Stock in a Liquidating Preference
amount equal to the unredeemed portion of his Series AA Preferred Stock. The
Redeemed Shares that may be delivered upon redemption as provided in this
Section 4, shall be the shares of Common Stock underlying the shares of Series C
Preferred Stock that are held in escrow for this purpose in accordance with a
certain escrow agreement among [INSERT APPROPRIATE NAMES] dated [INSERT
APPROPRIATE DATE].




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     5. Voting Rights. The holders of outstanding shares of Series AA Preferred
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Stock shall have no voting rights except as may be set forth in Section 4 above
or as required by Delaware law.

     6. Protective Provisions. So long as any shares of Series AA Preferred
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Stock are outstanding, the Company shall not, without first obtaining the
approval (by vote or by written consent, as provided by law) of the holders of
at least a majority of the then outstanding shares of Series AA Preferred Stock:

        (a) alter or change the rights, preferences or privileges of the Series
AA Preferred Stock so as to affect adversely such Series AA Preferred Stock;

        (b) increase or decrease (other than by redemption) the total number of
authorized shares of Series AA Preferred Stock; or

        (c) authorize or issue, or obligate itself to issue, any other equity
security, including any other security convertible into or exercisable for any
equity security (i) having a preference over, or being on a parity with, the
Series AA Preferred Stock upon liquidation, or (ii) having rights similar to any
of the rights of the Series AA Preferred Stock under this Section 6.

     7. Notices. Any notice required by the provisions hereof to be given to the
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holders of the Series AA Preferred Stock shall be deemed given if deposited by
mail, postage prepaid, and addressed to each holder of record at his or her
address appearing on the books of the Company.

IN WITNESS WHEREOF, the Company has caused this Certificate of Designations to
be signed by Anthony S. Conigliaro, its Secretary, as of the 31st day of August,
2003.


                                                     ---------------------------
                                                         Anthony S. Conigliaro


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