EXHIBIT 4.2

                          MPOWER HOLDING CORPORATION

                           CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                   7.25% SERIES D CONVERTIBLE PREFERRED STOCK

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                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware

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         Mpower Holding Corporation (the "Company"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, does hereby
certify that, pursuant to authority conferred upon the board of directors of the
Company (the "Board of Directors") by its Certificate of Incorporation, as
amended and restated on June 27, 2001 (the "Certificate"), and pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, said Board of Directors, by unanimous written consent or at a meeting
duly called and held, adopted the following resolution (the "Resolution") which
remains in full force and effect:

         RESOLVED that pursuant to the authority vested in the Board of
Directors by its Certificate, the Board of Directors does hereby create,
authorize and provide for the issuance of 7.25% Series D Cumulative Convertible
Preferred Stock, par value $0.001 per share, with a liquidation preference of
$50.00 per share, consisting of 4,250,000 shares having the designations,
preferences, relative, participating, optional and other special rights and the
qualifications, limitations and restrictions thereof that are set forth in this
Resolution as follows:

         (a) Designation. There is hereby created out of the authorized and
unissued shares of Preferred Stock of the Company a series of Preferred Stock
designated as the 7.25% Series D Cumulative Convertible Preferred Stock (the
"Series D Preferred Stock"). The number of shares constituting the Series D
Preferred Stock shall be 4,250,000. The liquidation preference of the Series D
Preferred Stock shall be $50.00 per share (the "Liquidation Preference").
Capitalized terms used herein but not defined shall have the meanings assigned
to them in paragraph (1).

                  In addition, the Board of Directors hereby acknowledges that
the Company is the successor of Mpower Communications Corp. ("Mpower"), a Nevada
corporation, for all purposes and, as such, pursuant to the Amended and Restated
Agreement and Plan of Merger dated as of April 12, 2001 (the "Merger
Agreement"), among the Company, Mpower and Mpower Merger Company, Inc., a
Delaware corporation, each and every share of Series D Preferred Stock created
hereby is subject to the same terms (including, but not limited to, all

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powers, rights, preferences, limitations, qualifications, restrictions or
designations) in effect at the Effective Time (as defined in the Merger
Agreement) with respect to a share of 7.25% Series D Cumulative Convertible
Preferred Stock of Mpower (the "Mpower Series D Preferred") outstanding at the
Effective Time (subject to any modification of such terms after the Effective
Time as provided herein) and each and every designation, preference and relative
and other special right, qualification, limitation and restriction on the Series
D Preferred Stock specified herein has been incorporated fully from the
Certificate of Designation governing the Mpower Series D Preferred and, as such,
is hereby modified to the same extent as such designation, preference and
relative and other special right, qualification, limitation and restriction
would have been modified in the Certificate of Designation governing the Mpower
Series D Preferred as of the Effective Time.

         (b) Rank. The Series D Preferred Stock will, with respect to dividend
rights and rights on liquidation, winding-up and dissolution, rank (i) senior to
all classes of Common Stock and to each other class of Capital Stock of the
Company or series of Preferred Stock of the Company established hereafter by the
Board of Directors of the Company, the terms of which do not expressly provide
that such class or series ranks senior to, or on a parity with, the Series D
Preferred Stock as to dividend rights and rights on liquidation, winding-up and
dissolution of the Company (collectively referred to, together with all classes
of Common Stock of the Company, as "Junior Stock"); (ii) on a parity with the
Company's Series C Preferred Stock and each class of Capital Stock of the
Company or series of Preferred Stock of the Company established hereafter by the
Board of Directors of the Company, the terms of which expressly provide that
such class or series will rank on a parity with the Series D Preferred Stock as
to dividend rights and rights on liquidation, winding-up and dissolution
(collectively referred to, together with the Company's Series C Preferred Stock,
as "Parity Stock"); and (iii) junior to each class of Capital Stock of the
Company or series of Preferred Stock of the Company established hereafter by the
Board of Directors of the Company, the terms of which expressly provide that
such class or series will rank senior to the Series D Preferred Stock as to
dividend rights or rights on liquidation, winding-up and dissolution of the
Company (collectively referred to as "Senior Stock").

         (c) Dividends.

                  (i) Subject to the rights of any holders of Senior Stock or
Parity Stock, Holders of the outstanding shares of Series D Preferred Stock will
be entitled to receive, when, as and if declared by the Board of Directors of
the Company, out of funds legally available therefor, dividends on each share of
the Series D Preferred Stock at a rate per annum equal to 7.25% of the
Liquidation Preference of such share payable quarterly (each such quarterly
period being herein called a "Dividend Period"). All dividends on the Series D
Preferred Stock, to the extent accrued, shall be cumulative, whether or not
earned or declared, on a daily basis from the last date through which dividends
have been paid or, if no dividends have been paid, from the Issue Date, and
shall be payable quarterly in arrears on May 15, August 15, November 15 and
February 15 of each year (each a "Dividend Payment Date"), commencing on May 15,
2000 to Holders of record as they appear on the stock register of the Company at
the close of business on the Record Date (as defined hereinafter) immediately
preceding the relevant Dividend Payment Date. No interest or sums of money or
other property or securities in lieu of interest will be

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payable in respect of any accumulated and unpaid dividends. "Record Date" means,
with respect to a Dividend Payment Date, the date established by the Board of
Directors as the record date therefor, which date shall, in any event, be a date
that is not more than 60 calendar days nor less than 15 calendar days before
such Dividend Payment Date.

         Any dividend on the Series D Preferred Stock shall be, at the option of
the Company, payable (A) in cash or (B) through the delivery of a number of
shares of the Company's Common Stock (dividends paid or payable in Common Stock
are hereinafter referred to as "Dividend Common Stock") equal to the total
dividend amount divided by the applicable Discounted Current Market Value (as
defined below) of the Common Stock. No fractional shares of Common Stock shall
be issued as a dividend on the Series D Preferred Stock. Instead, the Company
shall pay to the Transfer Agent for dissolution to the Holders as provided
herein cash in lieu of the fractional portion of one share which may result from
the computation of the number of shares of Dividend Common Stock as set forth in
the first sentence of this paragraph in an amount equal to the same traction of
the last sale price of a share of Common Stock on the Nasdaq National Market (or
the principal national securities exchange or other securities market on which
the Common Stock is then being traded) on the fourth Trading Day immediately
preceding the Dividend Payment Date. The Transfer Agent is hereby authorized to
aggregate any fractional shares of Common Stock that would otherwise be
distributable as dividends, and to sell them at the best available price and
distribute the proceeds to the Holders thereof in proportion to their respective
interests. The Company shall reimburse the Transfer Agent for any expenses
incurred with respect to such sale, including brokerage commissions. If the
Company is precluded from paying cash for fractional shares, it shall pay cash
to the Holders for the fractional shares when it becomes legally and
contractually able to pay such cash.

         The "Discounted Current Market Value" of the Common Stock with respect
to a Dividend Payment Date means the product of (x) 95% and (y) the "Market
Average Value" relating to such Dividend Payment Date. The "Market Average
Value" shall equal the average of the daily closing prices of the Common Stock
for the five consecutive Trading Days ending on (and including) the fourth
Trading Day preceding such Dividend Payment Date. The closing price for each
Trading Day will be the last sales price on such date on the Nasdaq National
Market (or the principal securities exchange or other securities market on which
the Common Stock is then being traded). "Trading Day" means any day on which the
Common Stock is traded for any period on the Nasdaq National Market (or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded).

                  (ii) All dividends paid with respect to shares of the Series D
Preferred Stock pursuant to paragraph (c)(i) shall be paid pro rata to the
Holders entitled thereto.

                  (iii) Dividends shall accrue whether or not the Company 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
shall accumulate to the extent that such dividends are not paid on the Dividend
Payment Date to which they relate. 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 D Preferred Stock with respect to any Dividend
Period

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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
dividend, upon all outstanding shares of Series D Preferred Stock. No dividend
will be declared or paid on any Parity Stock unless full cumulative dividends
have been paid on the Series D Preferred Stock for all prior Dividend Periods;
provided, however, if accrued dividends on the Series D Preferred Stock for all
prior Dividend Periods have not been paid in full, then any, dividend declared
for any dividend period on any Parity Stock will be declared ratably in
proportion to accrued and unpaid dividends on the Series D Preferred Stock and
such Parity Stock and if dividends on any Parity Stock are due and payable and
have not been paid in full, then any dividend declared for any Dividend Period
on the Series D Preferred Stock will be declared ratably in proportion to
accrued and unpaid dividends on the Series D Preferred Stock and such Parity
Stock. The Company shall take all actions required or permitted under the
General Corporate Law of the State of Delaware to permit the payment of
dividends on the Series D Preferred Stock.

                  (iv) The Company will not (A) declare, pay or set apart funds
for the payment of any dividend or other distribution with respect to any Junior
Stock or (B) redeem, purchase or otherwise acquire for consideration any Junior
Stock through a sinking fund or otherwise, unless (1) all accrued and unpaid
dividends with respect to the Series D Preferred Stock at the time such
dividends are payable have been paid or funds have been set apart for payment of
such dividends and (2) sufficient funds have been paid or set apart for, or a
sufficient number of shares of Common Stock have been reserved for, the payment
of the dividend for the current Dividend Period with respect to the Series D
Preferred Stock. Notwithstanding anything in this Certificate of Designation to
the contrary, the Company may declare and pay dividends on Parity Stock which
are payable solely in additional shares of or by the increase in the liquidation
value of Parity Stock or Junior Stock or on Junior Stock which are payable in
additional shares of or by the increase in the liquidation value of Junior
Stock, as applicable, or repurchase, redeem or otherwise acquire Junior Stock in
exchange for Junior Stock and Parity Stock in exchange for Parity Stock or
Junior Stock.

                  (v) Dividends for any past Dividend Period may be declared and
paid at any time, without reference to any regular Dividend Payment Date, to
Holders of record on a date established by the Board of Directors as the record
date therefor, which date shall be no more than 15 Business Days and no less
than one Business Day prior to the date of payment thereof, as such date may be
fixed by the Board of Directors of the Company.

                  (vi) Dividends payable on the Series D Preferred Stock for any
period other than a full Dividend Period shall be computed on the basis of a
360-day year consisting of twelve 30-day months. If a Dividend Payment Date is
not a Business Day, payment of dividends shall he made on the next succeeding
Business Day and dividends accruing for the intervening period shall be paid on
the next succeeding Dividend Payment Date.

         (d) Liquidation Preference.

                  (i) Upon any voluntary or involuntary liquidation. dissolution
or winding-up of the Company, and subject to the rights of holders of Senior
Stock and Parity Stock, each

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Holder of Series D Preferred Stock shall be entitled to be paid, out of the
assets of the Company available for distribution to its stockholders, an amount
equal to the Liquidation Preference for each share of Series D Preferred Stock
held by such Holder, plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends (whether declared or undeclared) thereon to the
date fixed for liquidation, dissolution or winding-up, before any distribution
is made on any Junior Stock. If, upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, there are not sufficient assets to pay
the amounts payable with respect to the Series D Preferred Stock and all Parity
Stock in full, all accumulated and unpaid dividends on the Series D Preferred
Stock and all Parity Stock will be paid in full and then the Holders of Series D
Preferred Stock and the holders of Parity Stock will share ratably (in
proportion to the other amounts that would be payable on such shares of Series D
Preferred Stock and the Parity Stock, respectively, if all amounts payable
thereon had been paid in full) in any distribution of assets of the Company to
which each is entitled. If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, there are not sufficient assets to pay
all accumulated and unpaid dividends in full, then the Holders of the Series D
Preferred Stock and the holders of Parity Stock will share ratably (in
proportion to the respective accumulated and unpaid dividends) in any
distribution of assets of the Company to which each is entitled. After payment
of the full amount of the Liquidation Preference of the outstanding shares of
Series D Preferred Stock (plus any accumulated and unpaid dividends), the
Holders of shares of Series D Preferred Stock will not be entitled to any
further participation in any distribution of assets of the Company.

                  (ii) For the purposes of this paragraph (d), neither the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation or merger of the Company with or into one or more
other entities shall be deemed to be a liquidation, dissolution or winding-up of
the Company.

         (e) Redemption.

                  (i) (A) Mandatory Redemption. On February 15, 2012 (the
"Mandatory Redemption Date"), the Company shall be required to redeem, subject
to the legal availability of funds therefor, all outstanding shares of Series D
Preferred Stock at a price in cash equal to the Liquidation Preference thereof,
plus accumulated and unpaid dividends, if any, whether declared or undeclared,
to the Mandatory Redemption Date (the "Mandatory Redemption Price"). The Company
shall not be required to make sinking fund payments with respect to the Series D
Preferred Stock. The Company shall take all actions required or permitted under
the laws of the State of Delaware to permit such redemption.

         (B) The Provisional Redemption. The Series D Preferred Stock may be
redeemed, in whole or in part, at the option of the Company at a redemption
price of 105.8% of the Liquidation Preference, plus accumulated and unpaid
dividends, if any, whether declared or undeclared, to the date fixed for such
redemption (the "Provisional Redemption Date") (the foregoing amounts, together
with the Additional Payment, as hereinafter defined, being the "Provisional
Redemption Price"), on or after February 15, 2002, but prior to February 15,
2003,

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if the closing price of the Common Stock equals or exceeds 150% of the
Conversion Price for at least 20 Trading Days within any 30 Trading Day period
(such redemption, a "Provisional Redemption"). In the event that the Company
Undertakes a Provisional Redemption, the Holders of shares of Series D Preferred
Stock that are called for Provisional Redemption will also receive a payment
(the "Additional Payment") in an amount equal to the present value (calculated
using the bond equivalent yield on U.S. Treasury notes or bills having a term
nearest in length to that of the Additional Period (as hereinafter defined) as
of the day immediately preceding the date on which a notice of Provisional
Redemption is mailed to the Holders) of the aggregate amount of the dividends
that would thereafter have been payable on the Series D Preferred Stock (whether
or not such dividends have been declared) for the period from the Provisional
Redemption Date to February 15, 2003 (such period being referred to as the
"Additional Period").

         The Provisional Redemption Price shall be, at the option of the
Company, payable (v) in cash, (w) through the delivery of a number of shares of
Common Stock equal to the Provisional Redemption Price divided by the
Provisional Redemption Value (as defined below) of the Common Stock or (x) any
combination of (v) and (w). The "Provisional Redemption Value" of the Common
Stock with respect to a Provisional Redemption Date means the product of (y) 95%
and (z) the average of the daily closing prices of the Common Stock for the five
consecutive Trading Days ending on (and including) the fourth Trading Day
preceding such Provisional Redemption Date. The closing price for each Trading
Day will be the last sales price on such date on the Nasdaq National Market (or
the principal securities exchange or other securities market on which the Common
Stock is then being traded). No fractional shares of Common Stock shall be
issued in connection with the payment of the Provisional Redemption Price.
Instead, the Company shall pay to the Transfer Agent for distribution to the
Holders as provided herein cash in lieu of the fractional portion of one share
which may result from the computation of the number of shares of Common Stock to
be paid as set forth in the first two sentences of this paragraph in an amount
equal to the same fraction of the last sales price of a share of Common Stock on
the Nasdaq National Market (or the principal national securities exchange or
other securities market on which the Common Stock is then being traded) on the
fourth Trading Day immediately preceding the Provisional Redemption Date. The
Transfer Agent is hereby authorized to aggregate any fractional shares of Common
Stock that would otherwise be distributed in connection with the payment of the
Provisional Redemption Price, and to sell them at the best available price and
distribute the proceeds to the Holders thereof in proportion to their respective
interests. The Company shall reimburse the Transfer Agent for any expenses
incurred with respect to such sale, including brokerage commissions. If the
Company is precluded from paying cash for fractional shares, it shall pay cash
to the Holders for the fractional shares, it shall pay when it becomes legally
and contractually able to pay such cash.

         The Company may elect to pay the Provisional Redemption Price by
delivering shares of Common Stock only if:

                  (i) The shares of Common Stock of the Company to be issued as
payment of the Provisional Redemption Price (x) shall not require registration
under any federal securities law before such shares may be freely transferable
without being subject to any transfer

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restrictions under the Securities Act or, if such registration is required, such
registration shall be completed and shall become effective prior to the
Provisional Redemption Date, and (y) shall not require registration with or
approval of any governmental authority under any state laws or any other federal
law before such shares may be validly issued or delivered or if such
registration is required or such approval must be obtained, such registration
shall be completed or such approval shall be obtained prior to the Provisional
Redemption Date;

                  (ii) The shares of Common Stock of the Company to be issued
are, or shall have been, approved for listing on the Nasdaq National Market or
the New York Stock Exchange or listed on another national securities exchange,
in any case, prior to the Provisional Redemption Date; and

                  (iii) All shares of Common Stock of the Company which may be
issued as payment of the Provisional Redemption Price will be issued out of the
Company's authorized but unissued Common Stock and, will upon issue, be duly and
validly issued and fully paid and non-assessable and free of any preemptive or
similar rights.

                      (C) In the case of any partial Provisional Redemption,
selection of the Series D Preferred Stock for redemption will be made by the
Company in compliance with the requirements of the principal national securities
exchange, if any, on which the Series D Preferred Stock is listed, or if the
Series D Preferred Stock is not listed on a national securities exchange, on a
pro rata basis, by lot or such other method as the Company, in its sole
discretion, shall deem fair and appropriate; provided, however, that the Company
may redeem all the shares held by Holders of fewer than 100 shares (or all of
the shares held by the Holders who would hold less than 100 shares as a result
of such redemption) as may be determined by the Company.

                      (D) In the case of a Mandatory Redemption Date or
Provisional Redemption Date falling after a Record Date and prior to the related
Dividend Payment Date, the Holders of the Series D Preferred Stock at the close
of business on such Record Date will be entitled to receive the dividend payable
on such shares on the corresponding Dividend Payment Date, notwithstanding the
redemption of such shares following such Record Date. Except as provided for in
the preceding sentence, no payment or allowance will be made for accrued
dividends on any shares of Series D Preferred Stock called for redemption.

                  (ii) Procedure for Redemption. (A) On and after the Mandatory
Redemption Date or Provisional Redemption Date, as the case may be, unless the
Company defaults in the payment of the applicable redemption price, dividends
will cease to accumulate on shares of Series D Preferred Stock called for
redemption and all rights of Holders of such shares will terminate except for
the right to receive the Mandatory Redemption Price or Provisional Redemption
Price, as the case may be, without interest.

                      (B) With respect to a redemption pursuant to paragraph
(e)(1)(A) or (B), the Company will send a written notice of redemption by first
class mail to each Holder of record of shares of Series D Preferred Stock, not
fewer than 30 days nor more than 60 days prior to the Mandatory Redemption Date
or Provisional Redemption Date, as applicable, at its

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registered address (the "Redemption Notice"); provided, however, that neither
the failure to give such notice nor any deficiency therein shall affect the
validity of the procedure for the redemption of any shares of Series D Preferred
Stock to be redeemed except as to the Holder or Holders to whom the Company has
failed to give said notice or except as to the Holder or Holders whose notice
was defective. The Redemption Notice shall state:

                  (1) that the redemption is pursuant to paragraph (e)(i)(A) or
(B) hereof, as applicable;

                  (2) the Mandatory Redemption Price or Provisional Redemption
Price, as applicable and, in the case of a Provisional Redemption, whether the
Provisional Redemption Price will be paid in cash, through the delivery of
shares of Common Stock, or a combination thereof (and, if a combination thereof,
stating the percentages of the total Provisional Redemption Price that will be
paid in cash and in shares of Common Stock);

                  (3) in the case of a Provisional Redemption as to which all or
a portion of the Provisional Redemption Price is to be paid through the delivery
of shares of Common Stock, that the determination of the number of shares of
Common Stock to be delivered shall be calculated as set forth in paragraph
(e)(i)(B);

                  (4) whether all or less than all the outstanding shares of the
Series D Preferred Stock are to be redeemed and the total number of shares of
the Series D Preferred Stock being redeemed;

                  (5) the Mandatory Redemption Date or Provisional Redemption
Date, as applicable;

                  (6) that the Holder is to surrender to the Company, in the
manner, at the place or places designated, his certificate or certificates
representing the shares of Series D Preferred Stock to be redeemed; and

                  (7) that dividends on the shares of the Series D Preferred
Stock to be redeemed shall cease to accumulate on such Mandatory Redemption Date
or Provisional Redemption Date, as the case may be, unless the Company defaults
in the payment of the Mandatory Redemption Price or Provisional Redemption
Price, as the case may be.

                  (C) Each Holder of Series D Preferred Stock shall surrender
the certificate or certificates representing such shares of Series D Preferred
Stock to the Company, duly endorsed (or otherwise in proper form for transfer,
as determined by the Company), in the manner and at the place designated in the
Redemption Notice, and the full Mandatory Redemption Price or Provisional
Redemption Price, as applicable, for such shares shall be payable in cash and/or
shares of Common Stock, as the case may be, on the Mandatory Redemption Date or
Provisional Redemption Date, as applicable, to the person whose name appears on
such certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired. In the event that less than all of
the shares represented by any such certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares.

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                  (D) The Company shall comply with any securities laws and
regulations, to the extent such laws and regulations are applicable, in
connection with any mandatory or provisional redemption.

         (f) Voting Rights.

                  (A) The Holders of Series D Preferred Stock shall not be
entitled to vote on any matter required or permitted to be voted upon by the
stockholders of the Company, except as otherwise required under Delaware law or
as hereinafter provided.

                  (B) (1) If (x) dividends on the Series D Preferred Stock are
in arrears and unpaid for six or more Dividend Periods (whether or not
consecutive), (y) the Company has not redeemed in cash all of the outstanding
shares of Series D Preferred Stock on the Mandatory Redemption Date, or (z)
after the occurrence of a Non-Stock Change of Control, the Company fails to
offer to repurchase or convert the Series D Preferred Stock in accordance with
the terms of paragraph (g)(H)(2) or fails to repurchase or convert any shares of
Series D Preferred Stock accepting such offer on the Repurchase Date (each a
"Voting Rights Triggering Event"), then the Holders of the then outstanding
shares of Series D Preferred Stock (together with the holders of Parity Stock
upon which like rights have been conferred and are exercisable), voting
separately and as a class, shall have the right and power to elect to serve on
the Board of Directors the lesser of (x) two additional members to the Board of
Directors or (y) that number of directors constituting at least 25% of the
members of the Board of Directors, and the number of members of the Board of
Directors shall, subject to paragraph (f)(B)(5), be immediately and
automatically increased by such number.

                  (2) The voting rights set forth in paragraph (f)(B)(1) above
will continue until such time as all dividends in arrears on the Series D
Preferred Stock are paid in full or all Voting Right, Triggering Events are
cured or waived, at which time the term of any directors elected pursuant to the
provisions of paragraph (f)(B)(1) above (subject to the right of holders of any
other Preferred Stock to elect directors pursuant to the terms of the
instruments governing such Preferred Stock) shall terminate forthwith and the
number of directors constituting the Board of Directors shall be decreased by
such number (until the occurrence of any subsequent Voting Rights Triggering
Event).

         At any time alter voting power to elect directors shall have become
vested and be continuing in the Holders of Series D Preferred Stock (together
with the holders of Parity Stock upon which like rights have been conferred and
are exercisable) pursuant to paragraph (f)(B)(1) hereof, or if vacancies shall
exist in the offices of directors elected by such holders, a proper officer of
the Company may, and upon the written request of the Holders of record of at
least 25% of the shares of Series D Preferred Stock then outstanding or the
holders of 25% of the shares of Parity Stock then outstanding upon which like
rights have been conferred and are exercisable addressed to the secretary of the
Company shall, call a special meeting of the Holders of Series D Preferred Stock
and the holders of such Parity Stock for the purpose of electing the directors
which such holders are entitled to elect pursuant to the terms hereof; provided,
however, that no such special meeting shall be called if the next annual meeting
of stockholders

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of the Company is to be held less than 60 days and more than 30 days after the
voting power to elect directors shall have become vested, in which case such
meeting shall be deemed to have been called for such next annual meeting. If
such meeting shall not be called by a proper officer of the Company within 20
days after personal service to the secretary of the Company at its principal
executive offices, then the Holders of record of at least 25% of the outstanding
shares of Series D Preferred Stock or the holders of 25% of the shares of Parity
Stock upon which like rights have been conferred and are exercisable may
designate in writing one of their members to call such meeting at the expense of
the Company, and such meeting may be called by the person so designated upon the
notice required for the annual meetings of stockholders of the Company and shall
be held at the place for holding the annual meetings of stockholders. Any holder
of Series D Preferred Stock or such Parity Stock so designated shall have, and
the Company shall provide, access to the lists of Holders of Series D Preferred
Stock and the holders of such Parity Stock to be called pursuant to the
provisions hereof. If no special meeting of the Holders of Series D Preferred
Stock and the holders of such Parity Stock is called as provided in this
paragraph (f)(B), then such meeting shall be deemed to have been called for the
next annual meeting of stockholders of the Company or special meeting of the
holders of any other Capital Stock of the Company.

                  (3) At any meeting held for the purposes of electing directors
at which the holders of Series D Preferred Stock (together with the holders of
Parity Stock upon which like rights have been conferred and are exercisable)
shall have the right, voting together as a separate class, to elect directors as
aforesaid, the presence in person or by proxy of the holders of at least a
majority in voting power of the outstanding shares of Series D Preferred Stock
(and such Parity Stock) shall be required to constitute a quorum thereof.

                  (4) Any vacancy occurring in the office of a director elected
by the Holders of Series D Preferred Stock (and such Parity Stock) may be filled
by the remaining director elected by the Holders of Series D Preferred Stock
(and such Parity Stock) unless and until such vacancy shall be filled by the
Holders of Series D Preferred Stock (and such Parity Stock).

                  (5) If an event occurs at any time that results in the holders
of any Parity Stock (other than the holders of the Series C Preferred Stock)
having voting rights to elect directors to the Board of Directors, then Holders
of Series D Preferred Stock shall, whether or not such event otherwise
constitutes a Voting Rights Triggering Event pursuant to paragraph (t)(B)(1),
have the voting rights set forth in paragraphs (f)(B)(1) and (f)(B)(2), and such
event shall be deemed (for purposes of this paragraph (f) only) to constitute a
Voting Rights Triggering Event. In addition, in the event that during a time in
which directors elected by the Holders of Series D Preferred Stock pursuant to
this paragraph (f)(B) are serving on the Board of Directors ("Previously-Elected
Directors") an event occurs that results in holders of Parity Stock (other than
the holders of the Series C Preferred Stock) having voting rights to elect
(voting together with the Holders of Series D Preferred Stock) at least two
directors to the Board of Directors, the Holders of Series D Preferred Stock
shall vote together with the holders of such Parity Stock to elect such new
directors, and upon the election of the new directors the Previously-Elected

                                       10
<PAGE>

Directors shall (unless such Previously-Elected Directors are elected as new
directors) cease to serve on the Board of Directors.

                  (C) (1) So long as any shares of the Series D Preferred Stock
are outstanding, the Company will not (i) authorize, create (by way of
reclassification or otherwise), increase the authorized amount of or issue any
class or series of Senior Stock or any obligation or security convertible into,
exchangeable for or evidencing the right to purchase shares of any class or
series of Senior Stock, or (ii) amend the provisions of paragraph (g)(H) hereof,
without the affirmative vote or consent of Holders of at least two-thirds of the
shares of Series D Preferred Stock then outstanding, voting or consenting, as
the case may be, as one class, given in person or by proxy, either in writing or
by resolution adopted at an annual or special meeting. However, without the
consent of any Holder of Series D Preferred Stock, the Company may increase the
authorized number of shares of, issue additional shares of or create additional
classes of Common Stock, increase the authorized number of shares of Preferred
Stock or issue a series of Parity Stock or Junior Stock.

                  (2) So long as any shares of the Series D Preferred Stock are
outstanding, the Company will not (i) amend this Certificate of Designation,
either directly or indirectly, or through merger or consolidation with another
entity, so as to affect adversely the specified rights, preferences, privileges
or voting rights of Holders of shares of Series D Preferred Stock or to increase
or decrease the aggregate number of authorized shares of Series D Preferred
Stock or (ii) waive any Voting Right Triggering Event or compliance with any
provision hereof without the affirmative vote or consent of Holders of at least
a majority of the issued and outstanding shares of Series D Preferred Stock,
voting or consenting, as the case may be, as one class, given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting.

                  (3) So long as any shares of the Series D Preferred Stock are
outstanding, without the consent of each Holder affected, an amendment or waiver
of the Certificate or of this Certificate of Designation may not (with respect
to any shares of Series D Preferred Stock held by a non-consenting Holder) (i)
alter the voting rights with respect to the Series D Preferred Stock (other than
the waiver of a Voting Rights Triggering Event as provided in paragraph
(f)(C)(2)) or reduce the number of shares of Series D Preferred Stock whose
holders must consent to an amendment, supplement or waiver; (ii) reduce the
Liquidation Preference of or alter the provisions with respect to the redemption
of the Series D Preferred Stock; (iii) reduce the rate of or change the time for
payment of dividends on any share of Series D Preferred Stock; (iv) make any
share of Series D Preferred Stock payable in any form other than that stated in
this Certificate of Designation; (v) after the occurrence of a Change of
Control, amend the provisions of paragraph (g)(H) hereof; or (vi) make any
change in the amendment and waiver provisions of this paragraph (f)(C)(3).

                  (4) Notwithstanding the foregoing, the Company when authorized
by resolutions of its Board of Directors may amend or supplement this
Certificate of Designation without the consent of any Holder to (i) cure any
ambiguity, defect or inconsistency or (ii) make

                                       11
<PAGE>

any other change provided that such amendments or supplements shall not
adversely affect the interests of the Holders.

                  (5) Except as set forth in paragraph (f)(C)(1) or (2) above,
(x) the creation, authorization or issuance of any shares of any Junior Stock or
Parity Stock, including the designation of a series of Preferred Stock, or (y)
the increase or decrease in the amount of authorized Capital Stock of any class,
including Preferred Stock, shall not require the consent of Holders of Series D
Preferred Stock and shall not be deemed to affect adversely the interests,
rights, preferences, privileges or voting rights of shares of Series D Preferred
Stock.

                  (D) In any case in which the Holders of Series D Preferred
Stock shall be entitled to vote pursuant to this paragraph (f) or pursuant to
Delaware law, each Holder of Series D Preferred Stock entitled to vote with
respect to such matters shall be entitled to one vote for each share of Series D
Preferred Stock held; provided that any shares of Series D Preferred Stock that
are held by the Company or by any Person controlled by the Company shall not
entitle the Holders thereof to any votes with respect thereto. For purposes of
this provision, "controlled by," as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting equity securities, by agreement or otherwise.

         (g) Conversion.

                  (A) (1) Except as set forth in paragraph (g)(A)(2) below, at
any time after the Issue Date, at the option of the Holder thereof, any share of
Series D Preferred Stock may be converted into such number of fully paid and
nonassessable shares of Common Stock (calculated as to each conversion to the
nearest 1/10 of a share), as equals the Liquidation Preference divided by the
Conversion Price, determined as hereinafter provided, in effect at the time of
conversion. In case a share of Series D Preferred Stock is called for
redemption, such conversion right in respect of the share of Series D Preferred
Stock so called shall expire at the close of business on the Mandatory
Redemption Date or Provisional Redemption Date, as applicable, unless the
Company defaults in making the payment due upon redemption.

                  (2) On or after February 15, 2003, if the closing price of the
Common Stock equals or exceeds 140% of the then current Conversion Price, as
hereinafter provided, for at least 20 Trading Days within any 30 consecutive
Trading Day period, then the Company shall have the right, at its option, to
cancel the conversion rights of the Holders of the Series D Preferred Stock
described in the paragraph above (the "Conversion Rights"). The closing price
for each Trading Day will be the last sales price on such date on the Nasdaq
National Market (or the principal national securities market or exchange on
which the Common Stock is then being traded). The Company may exercise such
right by issuing a press release for publication on the Dow Jones News Service
(or a comparable news service) prior to the opening of business on the second
Trading Day after any period in which the condition in the preceding sentence
has been met. The press release shall announce that (i) the Company is canceling
the Conversion Rights of the Series D Preferred Stock and (ii) the date such
Conversion Rights will expire (the "Expiration Date"). The press release shall
also provide the Conversion Price and the closing

                                       12
<PAGE>

price of the Common Stock, each as of the close of business of the previous
Trading Day. The Company must notify the Holders of the Series D Convertible
Preferred Stock of the expiration of the Conversion Rights by first-class mail
not more than four business days after the issuance of the press release,
provided, however, that neither the failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the
elimination of conversion rights except with respect to the Holder or Holders to
whom the Company failed to give such notice or whose notice was defective. The
Company will select the date upon which the Conversion Rights will expire, which
date will be not less than 30 nor more that 60 days after the date of the
issuance of the press release. The Conversion Rights of the Holders of the
Series D Convertible Preferred Stock will terminate at the close of business of
the Expiration Date.

                  (3) The price at which Common Stock shall be delivered upon
conversion (herein called the "Conversion Price") shall be initially $65.34 per
share of Common Stock. The Conversion Price shall be adjusted in certain
instances as provided in paragraph (g)(D) or paragraph (g)(H).

                  (B) In order to exercise the conversion privilege provided for
in paragraph (g)(A)(l), the Holder of any share of Series D Preferred Stock to
be converted shall Surrender the certificate for such share of Series D
Preferred Stock, duly endorsed or assigned to the Company or in blank, at the
office of the Transfer Agent or at any office or agency of the Company
maintained for that purpose, accompanied by written notice to the Company in the
form of Exhibit B that the Holder elects to convert such share of Series D
Preferred Stock or, if fewer than all the shares of Series D Preferred Stock
represented by a single share certificate are to be converted, the number of
shares represented thereby to be converted. Such notice shall also contain the
office or the address to which the Company should deliver shares of Common Stock
issuable upon conversion (and any other payments or certificates related
thereto).

         Holders of shares of Series D Preferred Stock at the close of business
on a Record Date will be entitled to receive the dividend payable on such shares
on the corresponding Dividend Payment Date notwithstanding the conversion of
such shares following such Record Date and prior to such Dividend Payment Date.
However, shares of Series D Preferred Stock surrendered for conversion during
the period between the close of business on any Record Date and the opening of
business on the corresponding Dividend Payment Date (except shares converted
after the issuance of a notice of redemption with respect to a redemption date
during such period, which will be entitled to such dividend) must be accompanied
by payment of an amount equal to the dividend payable on such shares on such
Dividend Payment Date. A Holder of shares of Series D Preferred Stock on a
Record Date who (or whose transferee) tenders any such shares for conversion
into shares of Common Stock on such Dividend Payment Date will receive the
dividend payable by the Company on such shares of Series D Preferred Stock on
such date, and the converting Holder need not include payment of the amount of
such dividend upon surrender of shares of Series D Preferred Stock for
conversion. Except as provided above, the Company will make no payment or
allowance for unpaid dividends, whether or not in arrears, on converted shares.

                                       13
<PAGE>

         Shares of Series D Preferred Stock shall be deemed to have been
converted immediately prior to the close of business on the date such shares of
Series D Preferred Stock are surrendered for conversion in accordance with the
foregoing provisions, and at such time the rights of the Holders of such shares
of Series D Preferred Stock as Holders shall cease, and the person or persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and shall deliver to such office or agency as the converting Holder
shall have designated in its written notice to the Company a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in paragraph (g)(C) hereof.

         In the case of any conversion of fewer than all the shares of Series D
Preferred Stock evidenced by a certificate, upon such conversion the Company
shall execute and the Transfer Agent shall authenticate and deliver to the
Holder thereof (at the address designated by such Holder), at the expense of the
Company, a new certificate or certificates representing the number of
unconverted shares of Series D Preferred Stock.

                  (C) No fractional shares of Common Stock shall be issued upon
the conversion of a share of Series D Preferred Stock. If more than one share of
Series D Preferred Stock shall be surrendered for conversion at one time by the
same Holder, the number of full shares of Common Stock which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate shares
of Series D Preferred Stock so surrendered. Instead of any fractional share of
Common Stock which would otherwise be issuable upon conversion of any share of
Series D Preferred Stock, the Company shall pay a cash adjustment in respect of
such fraction in an amount equal to the same fraction of the last sales price of
a share of Common Stock on the Nasdaq National Market (or the principal national
securities exchange or other securities market on which the Common Stock is then
being traded) on the last Trading Day immediately preceding the day of
conversion.

                  (D) The Conversion Price shall be adjusted from time to time
by the Company as follows, each a "Conversion Price Adjustment Event" (the
variables have the definitions set forth in paragraph (g)(D)(7) below):

                  (1) If the Company shall make any redemption payment or
payment of a dividend or other distribution payable in shares of Common Stock to
all holders of any class of Capital Stock of the Company, other than the
issuance of shares of Common Stock in connection with the payment (1) in
redemption for, of dividends on, or upon the conversion of, the Series D
Preferred Stock, (2) in redemption for, of dividends on, or upon the conversion
of the Series C Preferred Stock or any Parity Stock in accordance with the
Certificates of Designation governing such securities, or (3) to all Holders of
the Series D Preferred Stock based upon the number of shares of Common Stock
into which the Series D Preferred Stock is then convertible, then the Conversion
Price in effect immediately prior to such event shall be adjusted pursuant to
the formula: X/Y multiplied by CP=ACP.

                                       14
<PAGE>

                  (2) If the Company shall issue to all holders of shares of
Common Stock rights, options or warrants entitling them to subscribe for or
purchase shares of Common Stock or securities convertible into or exchangeable
for shares of Common Stock at an exercise price that is less than the closing
price of a share of Common Stock on the Nasdaq National Market (or the principal
national securities exchange or other securities market on which the Common
Stock is then being traded) on the last Trading Day immediately preceding the
date of issuance of such rights, options or warrants, then the Conversion Price
in effect immediately prior to such event shall be adjusted pursuant to the
formula: X/X+(U((ClosePrice-EP)/ ClosePrice)) multiplied by CP=ACP; provided,
however, that no adjustment will be made with respect to such a distribution if
the Holder of shares of the Series D Preferred Stock would be entitled to
receive such rights, options or warrants at any time on or before the conversion
at any time of shares of the Series D Preferred Stock into Common Stock and
provided, further, that if such rights, options or warrants are only exercisable
upon the occurrence of certain triggering events, then the Conversion Price will
not be adjusted until such triggering events occur. If any options, warrants or
other rights of the nature described in this paragraph (g)(D)(2) ("Rights")
expire without exercise or conversion, the Conversion Price will be readjusted
to the Conversion Price which would otherwise be in effect had the adjustment
made upon the issuance of such Rights been made on the basis of delivery of only
the number of shares of Common Stock actually delivered upon the exercise or
conversion of such Rights.

                  (3) In the case of any subdivision, combination or
reclassification of the Common Stock, then the Conversion Price in effect
immediately prior to such event shall be adjusted pursuant to the formula: X/Y
multiplied by CP=ACP.

                  (4) If the Company shall make any distribution consisting
exclusively of cash (excluding any cash distributed in a transaction for which
paragraph (g)(D)(12) below is applicable) to all holders of shares of Common
Stock (which distribution is not also being made to the Holders of Series D
Preferred Stock based on the number of shares of Common Stock into which the
Series D Preferred Stock is then convertible) in an aggregate amount that,
combined together with (1) all other such cash distributions made within the
then-preceding 12 months in respect of which no adjustment has been made and (2)
any cash and the fair market value (as determined by the Board of Directors in
good faith pursuant to a resolution) of other consideration paid or payable in
respect of any tender offer by the Company or any of its subsidiaries for shares
of Common Stock concluded within the then-preceding 12 months in respect of
which no adjustment has been made, exceeds 15% of the Company's Pre-Distribution
Market Capitalization (as defined in paragraph (g)(D)(7) below), then the
Conversion Price in effect immediately prior to such event shall be adjusted
pursuant to the formula: CP-(CP multiplied by ((Cash-15% PDMC)/PDMC))=ACP. There
will be no adjustment to the Conversion Price if (Cash-15% PDMC) is less than or
equal to zero.

                  (5) In the case of the completion of a tender or exchange
offer made by the Company or any of its subsidiaries for shares of Common Stock
(i) that involves an aggregate consideration that, together with (1) any cash
and other consideration payable in a tender or exchange offer by the Company or
any of its subsidiaries for shares of Common Stock expiring within the
then-preceding 12 months in respect of which no adjustment has been made

                                       15
<PAGE>

and (2) the aggregate amount of any such cash distributions referred to in
paragraph (g)(D)(4) above to all holders of shares of Common Stock within the
then-preceding 12 months in respect of which no adjustments have been made,
exceeds 15% of the Company's Post-Tender Market Capitalization (as defined in
paragraph (g)(D)(7) below) and (ii) where the tender offer price or exchange
offer price pr share of Common Stock is greater than the closing price of the
Common Stock on the Trading Day immediately succeeding the Expiration Time, then
the Conversion Price in effect immediately prior to such event shall be adjusted
pursuant to the formula: CP multiplied by ((EX multiplied by TotSh)/(TPur +
(NetSh multiplied by EX)))=ACP. There will be no adjustment to the Conversion
Price if the tender offer price or exchange offer price per share of Common
Stock is less than or equal to EX or if TOff is not greater than 15% of PTMC.

                  (6) If the Company shall make a distribution to all holders of
Common Stock (which distribution is not also being made to the Holders of the
Series D Preferred Stock based on the number of shares of Common Stock into
which the Series D Preferred Stock is then convertible) consisting of (i)
evidences of indebtedness, (ii) shares of Capital Stock of the Company other
than Common Stuck, or (iii) assets other than cash, including securities, but
excluding those dividends and those issuances of rights, options, warrants and
other distributions for which an adjustment to the Conversion Price as referred
to above is applicable (other than in connection with a merger effected solely
to reflect a change in the jurisdiction of incorporation of the Company), then
the Conversion Price in effect immediately prior to such event shall be adjusted
pursuant to the formula: CP-(Value/#Sh)=ACP.

                  (7) Variables. In the preceding descriptions, the variables
have the following definitions:

         "U" equals the number of shares of Common Stock underlying all rights,
options or warrants issued to holders of Common Stock pursuant to paragraph
(g)(D)(2) above entitling such holders to subscribe for or purchase shares of
Common Stock or securities convertible into or exchangeable for shares of Common
Stock issued in the Conversion Price Adjustment Event;

         "X" equals the total number of shares of Common Stock outstanding
immediately prior to the Conversion Price Adjustment Event (excluding
unexercised options, warrants or rights);

         "Y" equals the total number of shares of Common Stock outstanding
immediately after the Conversion Price Adjustment Event (excluding unexercised
options, warrants or rights);

         "Cash" equals the sum of (a) any distribution consisting exclusively of
cash (excluding any cash distributed upon a merger or consolidation to which
paragraph (g)(D)(12) below applies) to all holders of shares of Common Stock
(which distribution is not also being made to the Holders of Series D Preferred
Stock based upon the number of shares of Common Stock into which the Series D
Preferred Stock is then convertible) and (b) all other such all-cash
distributions made within the then-preceding 12 months in respect of which no
adjustment has been made and (c) any cash and the fair market value of other
consideration (as determined by the Board of Directors in good faith and
pursuant to a resolution) paid or payable in respect of

                                       16
<PAGE>

any tender offer by the Company or any of its subsidiaries for shares of any
class of Common Stock concluded within the then-preceding 12 months in respect
of which no adjustment has been made pursuant to paragraph (g)(D)(4) or (5);

         "ClosePrice" means with respect to any date, the last sales price of a
share of Common Stock on the Nasdaq National Market (or the principal national
securities exchange or other securities market on which the Common Stock is then
being traded) on the last Trading Day immediately preceding such date;

         "EP" equals the exercise price or other consideration to be paid by the
holder upon the conversion or exchange of "U";

         "EX" equals the closing price of the Common Stock on the Trading Day
immediately succeeding the Expiration Time;

         "Expiration Time" means, with respect to a tender or exchange offer
giving rise to a Conversion Price Adjustment Event pursuant to paragraph
(g)(D)(5), the last time that tenders of shares of Common Stock could have been
made pursuant to the terms of such tender or exchange offer (as the same may be
amended);

         "NetSh" means a number of shares of Common Stock equal to (a) TotSh
minus (b) Purchased Shares;

         "PDMC" or "Pre-Distribution Market Capitalization" means, with respect
to a Conversion Price Adjustment Event pursuant to paragraph (g)(D)(4), an
amount equal to the product of (a) the ClosePrice of the Common Stock as of the
record date with respect to the distribution constituting such Conversion Price
Adjustment Event multiplied by (b) the number of shares of Common Stock
outstanding at the close of business on the record date for such distribution;

         "PTMC" or "Post-Tender Market Capitalization" means, with respect to a
Conversion Price Adjustment Event pursuant to paragraph (g)(D)(5), an amount
equal to the product of (a) EX multiplied by (b) TotSh;

         "Purchased Shares" means, in connection with a tender or exchange offer
giving rise to a Conversion Price Adjustment Event pursuant to paragraph
(g)(D)(5), the number of shares of Common Stock accepted (up to any maximum
number of such shares specified in the terms of such tender or exchange offer)
and validly tendered and not withdrawn as of the Expiration Time;

         "#Sh" equals the number of shares of Common Stock receiving the
distribution contemplated in paragraph (g)(D)(6);

         "TOff" equals the sum of (a) the aggregate consideration paid by the
Company or any of its subsidiaries for shares of Common Stock in a tender or
exchange offer made by the Company or any of its subsidiaries for shares of
Common Stock and (b) any cash or other

                                       17
<PAGE>

consideration payable in a tender or exchange offer by the Company or any of its
subsidiaries for shares of Common Stock expiring within the then-preceding 12
months in respect of which no adjustment has been made and (c) the aggregate
amount of any such all-cash distributions referred to in paragraph (g)(D)(4) to
all holders of shares of Common Stock within the then-preceding 12 months in
respect of which no adjustments have been made;

         "TotSh" equals the total number of shares of Common Stock outstanding
(including any shares tendered in the tender or exchange offer) at the
Expiration Time;

         "TPur" equals the product of (a) the fair market value (as determined
by the Board of Directors in good faith pursuant to a resolution) of the
consideration payable for one share of Common Stock under the terms of the
tender or exchange offer giving rise to a Conversion Price Adjustment Event
pursuant to paragraph (g)(D)(5) multiplied by (b) the number of Purchased
Shares;

         "Value" equals the aggregate fair market value of the distribution
described in paragraph (g)(D)(6), as determined in good faith by the Board of
Directors of the Company pursuant to a resolution;

         "CP" equals the Conversion Price immediately prior to the Conversion
Price Adjustment Event;

         "ACP" equals the Conversion Price immediately after the Conversion
Price Adjustment Event.

         An adjustment made pursuant to paragraph (g)(D) shall become effective:
(A) in the case of a Conversion Price Adjustment Event described in paragraph
(g)(D)(1), (2), (4) or (6), immediately following the close of business on the
record date for the determination of holders of Common Stock entitled to
participate in such event; or (B) in the case of a Conversion Price Adjustment
Event described in paragraph (g)(D)(3), the close of business on the day upon
which such corporate action becomes effective; or (C) in the case of a
Conversion Price Adjustment Event described in paragraph (g)(D)(5), the close of
business on the Trading Day immediately succeeding the Expiration Time of such
tender offer or exchange offer.

                  (8) De Minimis Adjustments. No adjustment in the Conversion
Price shall be required (a) unless such adjustment would require an increase or
decrease of at least 1% of such price or (b) with respect to rights, options or
warrants issued pursuant to the Company's employee benefit plans; provided,
however, that any adjustments which by reason of paragraph (g)(D))(8)(a) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this paragraph (g)(D)(8) shall be
made by the Company and shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. No adjustment need be made for a
change in the par value or no par value of the Common Stock.

                  (9) Reductions in Conversion Price. The Company shall be
entitled to make such reductions in the Conversion Price, in addition to those
required by this paragraph

                                       18
<PAGE>

(g)(D), as the Company in its discretion shall determine to be advisable in
order that any stock dividends, subdivision of shares, distribution of rights to
purchase stock or securities or distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable to the recipients. In the event the Company elects to make such a
reduction in the Conversion Price, the Company will comply with the requirements
of Rule 14e-1 under the Exchange Act, and any other securities laws and
regulations thereunder if and to the extent that such laws and regulations are
applicable in connection with the reduction of the Conversion Price. Whenever
the Conversion Price is so decreased, the Company shall mail to Holders of
record of shares of Series D Preferred Stock a notice of the decrease at least
15 days before the date the decreased Conversion Price takes effect, and such
notice shall state the decreased Conversion Price.

                  (10) Decreases in Conversion Price. The Company from time to
time may decrease the Conversion Price by an amount determined by the Board of
Directors and described in a notice as hereinafter provided for any period of
time if the period is at least 20 days and if the decrease is irrevocable during
such period. Whenever the Conversion Price is so decreased, the Company shall
mail to Holders of record of shares of Series D Preferred Stock a notice of the
decrease at least 15 days before the date the decreased Conversion Price takes
effect, and such notice shall state the decreased Conversion Price and the
period it will be in effect.

                  (11) Distribution of Rights, Options or Warrants. In the event
that, after the issuance of the Series D Preferred Stock, the Company
distributes rights, options or warrants (other than those referred to in
paragraph (g)(D)(2) above and other than a distribution of rights, options or
warrants being made pro rata to the Holders of the Series D Preferred Stock
based upon the number of shares of Common Stock into which the Series D
Preferred Stock is then convertible) pro rata to all holders of shares of Common
Stock, so long as any such rights, options or warrants have not expired or been
redeemed by the Company, the Holder of any shares of Series D Preferred Stock
surrendered for conversion will be entitled to receive upon such conversion, in
addition to the shares of Common Stock then issuable upon such conversion (the
"Conversion Shares"), a number of rights, options or warrants to be determined
as follows:

                      (a) if such conversion occurs on or prior to the date (a
"Distribution Date") for the distribution to the holders of rights, options or
warrants of separate certificates evidencing such rights, options or warrants,
the same number of rights, options or warrants to which a holder of a number of
shares of Common Stock equal to the number of Conversion Shares is entitled at
the time of such conversion in accordance with the terms and provisions
applicable to the rights, options or warrants; and

                      (b) if such conversion occurs after such Distribution
Date, the same number of rights, options or warrants to which a holder of the
number of shares of Common Stock into which such Series D Preferred Stock was
convertible immediately prior to such Distribution Date would have been entitled
on such Distribution Date in accordance with the terms and provisions of and
applicable to the rights, options or warrants.

                                       19
<PAGE>

         (12) Merger or Consolidation. (a) In case of:


                 (i) any merger or consolidation of the Company with or into
another Person: or

                 (ii) any safe, transfer or other disposition to another Person
of all or substantially all of the assets of the Company computed on a
consolidated basis; or

                 (iii) any statutory exchange of securities with another Person,
other than in connection with a merger or acquisition, (any of the events
described in this paragraph (g)(D)(12)(a) being referred to as a "Transaction"),
there will be no adjustment to the Conversion Price except as required by
paragraph (g)(H).

         Upon the occurrence of a Transaction (other than (x) a consolidation or
merger in which the Company is the resulting or continuing Person and which does
not result in any reclassification or exchange of Common Stock outstanding
immediately prior to the merger or consolidation for cash, securities or other
property of another Person or (y) the sale, transfer, assignment or distribution
of shares of Capital Stock or assets to a subsidiary of the Company) and subject
to any adjustment to the Conversion Price required by paragraph (g)(H)(1), each
share of Series D Preferred Stock then outstanding shall, without the consent of
any Holder of Series D Preferred Stock (except as expressly required by
applicable law), become convertible only into the kind and amount of shares of
stock or other securities (of the Company or another issuer), cash or other
property receivable upon such Transaction by a holder of the number of shares of
Common Stock into which such share of Series D Preferred Stock could have been
converted immediately prior to the effective date of such Transaction, assuming
such holder of Common Stock failed to exercise his rights of election, if any,
as to the kind of amount of securities, cash or other property receivable upon
such Transaction.

                 (b) The provisions of this paragraph (g)(D)(12) similarly shall
apply to successive Transactions. The provisions of this paragraph (g)(D)(12),
and the provisions of paragraph (g)(H) to the extent applicable, shall be the
sole right of Holders of Series D Preferred Stock in connection with any
Transaction and, except as expressly provided by applicable law and paragraph
(f), such Holders shall have no separate vote thereon.

                 (13) Notice of Adjustment. Whenever the Conversion Price is
adjusted as provided in this paragraph (g)(D) or paragraph (g)(H), the Company
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 Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which such adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each Holder of Series D Preferred Stock 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.

                                       20
<PAGE>

                 (14) Deferred Issuance. In any case in which this paragraph
(g)(D) provides that an adjustment shall become effective immediately after a
record date for an event, the Company may defer until the occurrence of such
event issuing to the Holder of any share of Series D Preferred Stock converted
after such record date and before the occurrence of such event the additional
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment.

                 (15) Treasury Stock. For purposes of this paragraph (g)(D), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of Common Stock. The
Company shall not pay any dividend or make any distribution on Common Stock held
in the treasury of the Company.

                 (E) In case:

                 (1) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out of its
earned surplus; or

                 (2) the Company shall authorize the granting to all holders of
its Common Stock of rights or warrants to subscribe for or purchase any shares
of Capital Stock of any class or of any other rights; or

                 (3) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock), or of
any consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or the sale or transfer
of all or substantially all the assets of the Company: or

                 (4) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company:

then the Company shall cause to be filed with the Transfer Agent and at each
office or agency maintained for the purpose of conversion of the Series D
Preferred Stock, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the register of Holders 20 days (or 10 days in
any case specified in clause (1) or (2) 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 which the holders of Common Stock 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 Common
Stock of record shall be entitled to exchange their Common Stock 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 paragraph (g)(E) or any defect therein shall not
affect the legality or validity of any dividend, distribution, right, warrant,
reclassification,

                                       21
<PAGE>

consolidation, merger, sale, transfer, dissolution, liquidation or winding up,
or the vote upon any such action.

                 (F) The Company shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued shares of Common
Stock (or out of its authorized shares of Common Stock held in the treasury of
the Company), for the purpose of effecting the conversion of the Series D
Preferred Stock, the full number of shares of Common Stock then issuable upon
the conversion of all outstanding shares of Series D Preferred Stock.

                 (G) The Company will pay any and all document, stamp or similar
issue or transfer taxes that may be payable in respect of the issue or delivery
of Common Stock on conversion of the Series D Preferred Stock pursuant hereto.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that of the Holder of the share of Series D
Preferred Stock or the shares of Series D Preferred Stock to be converted, and
no such issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has been paid.

                 (H) (1) Notwithstanding any other provision in the preceding
paragraphs to the contrary, if any Common Stock Change of Control occurs, then
the Conversion Price in effect shall be adjusted immediately after such Common
Stock Change of Control as described below and, each share of the Series D
Preferred Stock shall be convertible solely into common stock of the kind
received by holders of Common Stock as the result of such Common Stock Change of
Control. For purposes of calculating any adjustment to be made pursuant to this
paragraph, immediately after a Common Stock Change of Control, the Conversion
Price in effect immediately prior to such Common Stock Change of Control, but
after giving effect to any prior adjustments, shall be adjusted by multiplying
such Conversion Price by a fraction, of which the numerator shall be the
Purchaser Stock Price (as defined in this paragraph (g)(H)(3)) and the
denominator shall be the Applicable Price (as defined in this paragraph
(g)(H)(3)): provided. however, that in the event of a Common Stock Change of
Control in which (x) 100% of the value of the consideration received by a holder
of Common Stock is common stock of the successor, acquirer, or other third party
(and cash, if any, is paid only with respect to any fractional interest in such
common stock resulting from such Common Stock Change of Control) and (y) all of
the Common Stock will have been exchanged for, converted into, or acquired for,
common stock (and cash only with respect to fractional interests) of the
successor, acquirer or other third party, the Conversion Price in effect
immediately prior to such Common Stock Change of Control shall thereupon be
adjusted by multiplying such Conversion Price by a fraction, of which the
numerator shall be one (1) and the denominator shall be the number of shares of
common stock of the successor, acquirer, or other third party received by a
holder of one share of Common Stock as a result of such Common Stock Change of
Control.

                     (2) If a Non-Stock Change of Control occurs, each Holder of
Series D Preferred Stock may require the Company to redeem all such Holder's
shares of Series D Preferred Stock at a price (the "Repurchase Price") equal to
100% of the Liquidation Preference,

                                       22
<PAGE>

plus accumulated and unpaid dividends, if any, whether declared or undeclared,
to the date fixed for such redemption (the "Repurchase Date"); provided,
however, that no Holder of Series D Preferred Stock shall have the right to
require the redemption or repurchase of Series D Preferred Stock prior to the
date on which the Senior Secured Notes mature or such earlier date on which the
Senior Secured Notes have been paid in full (the "Debt Maturity Date").

         Following a Non-Stock Change of Control prior to the Debt Maturity
Date, if the Holders of Series D Preferred Stock, but for the proviso set forth
in the immediately preceding paragraph of this paragraph (H)(2), would have the
right to require the Company to redeem all such Holder's shares of Series D
Preferred Stock, then each Holder of Series D Preferred Stock may, instead of
requiring the Company to redeem or repurchase such Holder's shares of Series D
Preferred Stock, require the Company to convert such Holder's shares of Series D
Preferred Stock into Common Stock on the Repurchase Date as provided below.

         Subject to the conditions set forth below, the Repurchase Price shall
be, at the option of the Company, payable (v) in cash, (w) through the delivery
of a number of shares of Common Stock equal to the Repurchase Price divided by
the Discounted Stock Value or (x) any combination of (v) and (w). The
"Discounted Stock Value" means the product of (y) 95% and (z) the average of the
daily closing prices of the Common Stock for the five consecutive Trading Days
ending on (and including) the fourth Trading Day preceding such Repurchase Date.
The closing price for each Trading Day will be the last sales price on such date
on the Nasdaq National Market (or the principal securities exchange or other
securities market on which the Common Stock is then being traded). No fractional
shares of Common Stock shall be issued in connection with the payment of the
Repurchase Price. Instead, the Company shall pay to the Transfer Agent for
distribution to the Holders as provided herein cash in lieu of the fractional
portion of one share which may result from the computation of the number of
shares of Common Stock as set forth in the first two sentences of this paragraph
in an amount equal to the same fraction of the last sales price of a share of
Common Stock on the Nasdaq National Market (or the principal national securities
exchange or other securities market on which the Common Stock is then being
traded) on the fourth Trading Day immediately preceding the Repurchase Date. The
Transfer Agent is hereby authorized to aggregate any fractional shares of Common
Stock that would otherwise be distributable in connection with the payment of
the Repurchase Price, and to sell them at the best available price and
distribute the proceeds to the Holders thereof in proportion to their respective
interests. The Company shall reimburse the Transfer Agent for any expenses
incurred with respect to such sale, including brokerage commissions. If the
Company is precluded from paying cash for fractional shares, it shall pay cash
to the Holders for the fractional shares when it becomes legally and
contractually able to pay such cash.

         The Company may elect to pay the Repurchase Price by delivering shares
of Common Stock only if:

         (i) The shares of Common Stock of the Company to be issued as payment
of the Repurchase Price (x) shall not require registration under any federal
securities law before such shares may be freely transferable without being
subject to any transfer restrictions under the Securities Act or, if such
registration is required, such registration shall be completed and shall

                                       23
<PAGE>

become effective prior to the Repurchase Date, and (y) shall not require
registration with or approval of any governmental authority under any state law
or any other federal law before such shares may be validly issued or delivered
or if such registration is required or such approval must be obtained, such
registration shall be completed or such approval shall be obtained prior to the
Repurchase Date;

         (ii) The shares of Common Stock of the Company to be issued are, or
shall have been, approved for listing on the Nasdaq National Market or the New
York Stock Exchange or listed on another national securities exchange, in any
case, prior to the Repurchase Date; and

         (iii) All shares of Common Stock of the Company which may be issued as
payment of the Repurchase Price will be issued out of the Company's authorized
but unissued Common Stock and, will upon issue, be duly and validly issued and
fully paid and nonassessable and free of any preemptive or similar rights.

         In the event the Company is restricted from repurchasing shares of the
Series D Preferred Stock on the Repurchase Date pursuant to the terms of its
outstanding indebtedness, Holders of the Series D Preferred Stock may convert
each share of Series D Preferred Stock into a number of shares of Common Stock
equal to the Repurchase Price divided by the Discounted Stock Value.

         In connection with the conversion of shares of Series D Preferred Stock
on the Repurchase Date, the Company shall apply and use its best efforts to have
the shares of Common Stock to be issued upon conversion of the Series D
Preferred Stock approved for listing on the Nasdaq National Market or the New
York Stock Exchange or listing on another national securities exchange prior to
the Repurchase Date. All shares of Common Stock of the Company which may be
issued upon conversion of the Series D Preferred Stock as provided in this
paragraph (H)(2) will be issued out of the Company's authorized but unissued
Common Stock and will, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any pre-emptive or similar rights.

         In the case of a Repurchase Date falling after a Record Date and prior
to the related Dividend Payment Date, the Holders of the Series D Preferred
Stock at the close of business on such Record Date will be entitled to receive
the dividend payable on such shares on the corresponding Dividend Payment Date,
notwithstanding the redemption or conversion of such shares following such
Record Date. Except as provided for in the preceding sentence, no payment or
allowance will be made for accrued dividends on any shares of Series D Preferred
Stock redeemed or converted pursuant to this paragraph (H)(2).

         On and after the Repurchase Date, unless the Company defaults in the
payment of the Repurchase Price or the conversion of the Series D Preferred
Stock, dividends will cease to accumulate on shares of Series D Preferred Stock
to be redeemed or converted and all rights of Holders of such shares will
terminate except for the right to receive the Repurchase Price, without
interest, or the number of shares of Common Stock into which the shares of the
Series D Preferred Stock have been converted.

                                       24
<PAGE>

         Within 30 days after the occurrence of a Non-Stock Change of Control,
the Company will (a) publish a notice of the occurrence of a Non-Stock Change of
Control in the Wall Street Journal or similar daily business publication of
national distribution and (b) send a written notice by first class mail to each
Holder of record of shares of Series D Preferred Stock, at its registered
address, and to the Transfer Agent (the "Company Notice"); provided, however,
that neither the failure to give such notice nor any deficiency therein shall
affect the validity of the procedure for the redemption or conversion of any
shares of Series D Preferred Stock to be redeemed or converted except as to the
Holder or Holders to whom the Company has failed to give said notice or except
as to the Holder or Holders whose notice was defective. The Company Notice shall
state:

         (i) that a Non-Stock Change of Control has occurred,

         (ii) the Repurchase Price, whether shares of the Series D Preferred
Stock will be redeemed or converted, and in the event of a redemption, whether
the Repurchase Price will be paid in cash, through the delivery of shares of
Common Stock, or a combination thereof (and, if a combination thereof, stating
the percentages of the total Repurchase Price that will be paid in cash and in
shares of Common Stock);

         (iii) in the event of a redemption, if all or a portion of the
Repurchase Price is to be paid through the delivery of shares of Common Stock,
that the determination of the number of shares of Common Stock to be delivered
shall be calculated as set forth above;

         (iv) in the event of a conversion, that the determination of the number
of shares of Common Stock to be delivered shall be calculated as set forth
above;

         (v) the Repurchase Date, which shall be no earlier than the 30 days and
no later than 60 days following the date of the Company Notice;

         (vi) that to elect to participate in the redemption or conversion, as
the case may be, the Holder must deliver to the Transfer Agent the certificate
or certificates representing the shares of Series D Preferred Stock to be
redeemed or converted along with a written election to participate, on or before
5:00 p.m., New York City time, on the 30th day after the date of the Company
Notice;

         (vii) that unless the Company defaults in the payment of the Repurchase
Price or the conversion of the Series D Preferred Stock, dividends on the shares
of the Series D Preferred Stock tendered to the Company shall cease to
accumulate on such Repurchase Date; and

         (viii) that any shares of Series D Preferred Stock not tendered to the
Company will continue to accumulate dividends in accordance with the terms
hereof.

         To exercise the repurchase right or conversion right granted by this
paragraph (H)(2), a Holder of Series D Preferred Stock must surrender the
certificate or certificates representing such shares of Series D Preferred
Stock, duly endorsed (or otherwise in proper form

                                       25
<PAGE>

for transfer, as determined by the Company), together with a written notice of
election to participate in the repurchase right or conversion right, as the case
may be, to the Transfer Agent on or before 5:00 p.m., New York City time, on the
30th day after the date of the Company Notice, and on the Repurchase Date (A) in
the event of a redemption, the Repurchase Price for such shares shall be payable
in cash and/or shares of Common Stock, as the case may be, to the person whose
name appears on such certificate or certificates as the owner thereof, and each
surrendered certificate shall be canceled and retired, or (B) such shares shall
be converted into shares of Common Stock and each surrendered certificate shall
be canceled and retired.

         On the Repurchase Date, the Company shall, to the extent lawful, (A)
accept for payment or conversion shares of Series D Preferred Stock validly
tendered and (B) promptly deliver the Repurchase Price or the number of shares
of Common Stock into which such shares of Series D Preferred Stock have been
converted to each holder of shares of Series D Preferred Stock validly tendered
to the Company. The Company shall publicly announce the results of the Non-Stock
Change of Control offer on or as soon as practicable after the Repurchase Date.

         The Company shall comply with any securities laws and regulations, to
the extent such laws and regulations are applicable to the repurchase or
conversion of shares of the Series D Preferred Stock, in connection with a
Non-Stock Change of Control.

         Notwithstanding the foregoing, the Company shall not be required to
offer to repurchase or convert, and repurchase or convert, securities tendered
pursuant to this paragraph (H)(2) following a Non-Stock Change of Control if a
third party makes the offer to repurchase securities tendered pursuant to this
paragraph (H)(2) in the manner, at the times and otherwise in compliance with
the requirements set forth in this paragraph (H)(2) and purchases all of the
Series D Preferred Stock validly tendered and not withdrawn pursuant to such
provision.

                  (3) For purposes of this paragraph (H), the following terms
shall have the meanings indicated:

         "Applicable Price" means the average of the closing bid prices for the
Common Stock during the ten Trading Days prior to and including the record date
for the determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Common Stock Change
of Control or, if there is no such record date, the date upon which the holders
of the Common Stock shall have the right to receive such cash, securities,
property or other assets, in each case, as adjusted in good faith by the Board
of Directors to appropriately reflect any of the events referred to in paragraph
(g)(D)(1) through (6).

         "Beneficial Owner" means a beneficial owner as defined in Rules 13d-3
and 13d-5 under the Exchange Act (or any successor rules), including the
provision of such Rules that a Person shall be deemed to have beneficial
ownership of all securities that such Person has a right to acquire within 60
days; provided that a Person will not be deemed a beneficial owner of, or to own
beneficially, any securities if such beneficial ownership (1) arises solely as a
result of a revocable proxy delivered in response to a proxy or consent
solicitation made pursuant to,

                                       26
<PAGE>

and in accordance with, the Exchange Act and (2) is not also then reportable on
Schedule 13D or Schedule 13G (or any successor schedule) under the Exchange Act.

         "Change of Control" means: (i) the sale, lease, transfer, conveyance,
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all the assets of the
Company and its subsidiaries taken as a whole to any "person" (as such term is
used in Section 13(d)(3) of the Exchange Act), (ii) the adoption of a plan
relating to the liquidation, dissolution or winding-up of the Company, (iii) the
consummation of any transaction (including any merger or consolidation) the
result of which is that any "person" (as defined above) other than any Permitted
Holder becomes the Beneficial Owner, directly or indirectly, of more than 50% of
the Voting Stock of the Company plus any voting stock not yet outstanding but
deemed to be Beneficially Owned by such "person" (as defined above), (iv) the
first day on which the Permitted Holders collectively become the Beneficial
Owners, directly or indirectly, of more than 50% of the Voting Stock of the
Company plus any voting stock not yet outstanding but deemed to be Beneficially
Owned by the Permitted Holders, or (v) the first day on which a majority of the
members of the Board of Directors are not Continuing Directors.

         "Common Stock Change of Control" means any Change of Control in which
more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that for each of the ten consecutive Trading Days
referred to in the definition of "Applicable Price" has been admitted for
listing or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on the Nasdaq National Market; provided, however,
that a Change of Control shall not be a Common Stock Change of Control unless
either (i) the Company continues to exist after the occurrence of such Change of
Control and the outstanding shares of Series D Preferred Stock continue to exist
as outstanding shares of Series D Preferred Stock, or (ii) not later than the
occurrence of such Change of Control, the outstanding shares of Series D
Preferred Stock are converted into or exchanged for shares of convertible
preferred stock of a corporation succeeding to the business of the Company,
which convertible preferred stock has powers, preferences and relative,
participating, optional or other rights, and qualifications, limitations and
restrictions, substantially similar to those of the Series D Preferred Stock.

         "Continuing Directors" means, as of any date of determination,
individuals who on the Issue Date constituted the Board of Directors (together
with any new directors whose election by the Board of Directors or whose
nomination for election by the Company's stockholders was approved by a vote of
a majority of the members of the Board of Directors then in office who either
were members of the Board of Directors on the Issue Date or whose election or
nomination for election was previously so approved).

         "Non-Stock Change of Control" means any Change of Control other than a
Common Stock Change of Control.

         "Permitted Holders" means: (i) Providence Equity Partners Inc., JK&B
Capital, L.P., or any of their affiliates, (ii) any of Maurice J. Gallagher,
Jr., Timothy P. Flynn, Rolla P.

                                       27
<PAGE>

Huff or their respective spouses or lineal descendants and their respective
spouses (collectively, the "Individual Family Holders") whether acting in their
own name or as a majority of persons having the power to exercise the voting
rights attached to, or having investment power over, shares held by others,
(iii) any affiliate of any member of the Individual Family Holders, (iv) any
trust principally for the benefit of one or more members of the Individual
Family Holders (whether or not any member of the Individual Family Holders is a
trustee of such trust) and (v) any charitable foundation whose majority of
members, trustees or directors, as the case may be, are persons referred to in
(ii) above.

         "Purchaser Stock Price" means, the product of (i) the number of shares
of common stock received as consideration in such Common Stock Change of Control
for each share of Common Stock, and (ii) the average of the per share closing
bid prices for the common stock received as consideration in such Common Stock
Change of Control for the ten consecutive Trading Days prior to and including
the record date for the determination of the holders of Common Stock entitled to
receive such common stock, or if there is no such record date, the date upon
which the holders of the Common Stock shall have the right to receive such
common stock, in each case, as adjusted in good faith by the Board of Directors
to appropriately reflect any of the events referred to in paragraph (g)(D)(1)
through (6); provided, however, that if no such closing bid prices exist, then
the Purchaser Stock Price shall be set at a price determined in good faith by
the Board of Directors of the Company.

         "Senior Secured Notes" means Mpower Communications Corp.'s 13% Senior
Secured Notes due 2004.

         (h) Reissuance of Series D Preferred Stock. Shares of Series D
Preferred Stock that have been issued and reacquired in any manner, including
shares purchased, redeemed, converted or exchanged, shall not be reissued as
shares of Series D Preferred Stock and shall (upon compliance with any
applicable provisions of the laws of Delaware) have the status of authorized and
unissued shares of Preferred Stock undesignated as to series and may be
redesignated and reissued as part of any series of Preferred Stock; provided,
however, that so long as any shares of Series D Preferred Stock are outstanding,
any issuance of such shares must be in compliance with the terms hereof. Upon
any such reacquisitions, the number of shares of Series D Preferred Stock
authorized pursuant to this Certificate of Designation shall be reduced by the
number of shares so acquired.

         (i) Business Day. If any payment, redemption or exchange shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption or exchange shall be made on the immediately succeeding
Business Day.

         (j) Limitation on Mergers and Asset Sales. Without the vote or consent
of the holders of a majority of the then outstanding shares of Series D
Preferred Stock, the Company 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) (1) the successor, transferee or lessee
(if not the Company) is organized and existing under the laws of the United
States of America or any State thereof or the District of Columbia; (2) the
Series D Preferred

                                       28
<PAGE>

Stock shall be converted into or exchanged for and shall become shares of such
successor, transferee or lessee, having in respect of such successor,
transferee, or lessee substantially the same powers, preference and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions thereon, that the Series D Preferred Stock had
immediately prior to such transaction; and (3) the Company delivers to the
Transfer Agent an Officers' Certificate and an Opinion of Counsel stating that
such consolidation, merger or transfer complies with this Certificate of
Designation, or (B) (1) the consideration received by the holders of Common
Stock consists entirely of cash, (2) upon consummation of such transaction, each
share of Series D Preferred Stock shall be converted into or exchanged for cash
in an amount at least equal to the greater of (a) the amount which would he paid
to a holder of the number of shares of Common Stock into which such share of
Series D Preferred Stock could convert immediately prior to the consummation of
such transaction and (b) the liquidation preference of such share of Series D
Preferred Stock plus all accumulated and unpaid dividends, if any, whether or
not declared, to the date of the consummation of such transaction and (3) the
Company delivers to the Transfer Agent an Officers' Certificate and an Opinion
of Counsel stating that such consolidation, merger or transfer complies with
this Certificate of Designation, or (C) (1) the consideration to be received by
the holders of Common Stock in respect of each share of Common Stock has a value
which, for any five Business Days during the period commencing on the date that
the Company publicly announces such consolidation, merger or transfer and ending
ten Business Days thereafter, is equal to or greater than 140% of the Conversion
Price in effect on the date of such public announcement by the Company, (2) the
Consolidated Net Worth of the successor, transferee or lessee is equal to or
exceeds an amount equal to the product of two, multiplied by the Consolidated
Net Worth of the Company immediately prior to such consolidation, merger, or
transfer, and (3) the Company delivers to the Transfer Agent an Officers'
Certificate and an Opinion of Counsel stating that such consolidation, merger or
transfer complies with this Certificate of Designation.

         For purposes of this paragraph (j), "Consolidated Net Worth" shall
mean, in respect of any Person, the total amount shown on the balance sheet of
such Person and its consolidated subsidiaries, determined on a consolidated
basis in accordance with generally accepted accounting principles, as of the end
of the most recent fiscal quarter of such Person for which internal financial
statements are then available, prior to the taking of any action for which the
determination is made, as (i) the par or stated value of all of the outstanding
capital stock of such Person, plus (ii) paid-in capital or capital surplus
relating to such capital stock, plus (iii) any retained earnings or earned
surplus, less any accumulated deficit.

         In the event of any consolidation or merger or conveyance, transfer or
lease of all or substantially all of the assets of the Company that is permitted
pursuant to this paragraph (j), the successor resulting from such consolidation
or into which the Company is merged or the transferee or lessee to which such
conveyance, transfer or lease is made, will succeed to, and be substituted for,
and may exercise every right and power of, the Company with respect to the
Series D Preferred Stock, and thereafter, except in the case of a lease, the
predecessor (if still in existence) shall be released from its obligations and
covenants with respect to the Series D Preferred Stock.

                                       29
<PAGE>

         (k) Certificates.

         (i) Form and Dating. The Series D Preferred Stock and the Transfer
Agent's certificate of authentication shall be substantially in the form of
Exhibit A, which is hereby incorporated in and expressly made a part of this
Certificate of Designation. The Series D Preferred Stock certificate may have
notations, legends or endorsements required by law, stock exchange rules,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Series D Preferred Stock certificate shall be dated the date of its
authentication. The terms of the Series D Preferred Stock certificate set forth
in Exhibit A are part of the terms of this Certificate of Designation.

         (ii) Execution and Authentication. Two Officers shall sign the Series D
Preferred Stock certificates for the Company by manual or facsimile signature.
The Company's seal shall be impressed, affixed, imprinted or reproduced on the
Series D Preferred Stock certificates and may be in facsimile form.

         If an Officer whose signature is on a Series D Preferred Stock
certificate no longer holds that office at the time the Transfer Agent
authenticates the Series D Preferred Stock certificate, the Series D Preferred
Stock certificates shall be valid nevertheless. A Series D Preferred Stock
certificate shall not be valid until an authorized signatory of the Transfer
Agent manually signs the certificate of authentication on the Series D Preferred
Stock certificate. The signature shall be conclusive evidence that the Series D
Preferred Stock certificate has been authenticated under this Certificate of
Designation. The Transfer Agent shall authenticate and deliver certificates for
up to 4,250,000 shares of Series D Preferred Stock for original issue upon a
written order of the Company signed by two Officers of the Company. Such order
shall specify the number of shares of Series D Preferred Stock to be
authenticated and the date on which the original issue of Series D Preferred
Stock is to be authenticated.

         The Transfer Agent may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the certificates for Series D
Preferred Stock. Unless limited by the terms of such appointment, an
authenticating agent may authenticate certificates for Series D Preferred Stock
whenever the Transfer Agent may do so. Each reference in this Certificate of
Designation to authentication by the Transfer Agent includes authentication by
such agent. An authenticating agent has the same rights as the Transfer Agent or
agent for service of notices and demands.

         (iii) Transfer and Exchange of Shares of Series D Preferred Stock. (A)
When shares of Series D Preferred Stock are presented to the Transfer Agent with
a request to register the transfer of such shares of Series D Preferred Stock or
to exchange such shares of Series D Preferred Stock for an equal number of
shares of Series D Preferred Stock of other authorized denominations, the
Transfer Agent shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the certificate representing such shares of Series D Preferred Stock
surrendered for transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably

                                       30
<PAGE>

satisfactory to the Company and the Transfer Agent, duly executed by the Holder
thereof or its attorney duly authorized in writing.

         (B) Obligations with Respect to Transfers and Exchanges of Series D
Preferred Stock. (1) To permit registrations of transfers and exchanges, the
Company shall execute and the Transfer Agent shall authenticate certificates
representing shares of Series D Preferred Stock as required pursuant to the
provisions of this paragraph (k)(iii).

         (2) All shares of Series D Preferred Stock issued upon any registration
of transfer or exchange of shares of Series D Preferred Stock shall be the valid
obligations of the Company, entitled to the same benefits under this Certificate
of Designation as the shares of Series D Preferred Stock surrendered upon such
registration of transfer or exchange.

         (3) Prior to due presentment for registration of transfer of any shares
of Series D Preferred Stock, the Transfer Agent and the Company may deem and
treat the person in whose name such shares of Series D Preferred Stock are
registered as the absolute owner of such Series D Preferred Stock and neither
the Transfer Agent nor the Company shall be affected by notice to the contrary.

         (4) No service charge shall be made to a Holder for any registration of
transfer or exchange upon surrender of any certificate representing shares of
Series D Preferred Stock or shares of Common Stock at the office of the Transfer
Agent maintained for that purpose. However, the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Series D
Preferred Stock certificates or Common Stock certificates.

         (C) No Obligation of the Transfer Agent. The Transfer Agent shall have
no obligation or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Certificate of Designation or under
applicable law with respect to any transfer of any interest in any Series D
Preferred Stock other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Certificate of Designation, and to
examine the same to determine substantial compliance as to form with the express
requirements hereof.

         (iv) Replacement Certificates. If a modified Series D Preferred Stock
certificate is surrendered to the Transfer Agent or if the Holder of a Series D
Preferred Stock certificate claims that the Series D Preferred Stock certificate
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Transfer Agent shall countersign a replacement Series D Preferred Stock
certificate if the reasonable requirements of the Transfer Agent and of Section
8-405 of the Uniform Commercial Code as in effect in the State of New York are
met. If required by the Transfer Agent or the Company, such Holder shall furnish
an indemnity bond sufficient in the judgment of the Company and the Transfer
Agent to protect the Company and the Transfer Agent from any loss which either
of them may suffer if a Series D Preferred Stock

                                       31
<PAGE>

certificate is replaced. The Company and the Transfer Agent may charge the
Holder for their expenses in replacing a Series D Preferred Stock certificate.

         (v) Temporary Certificates. Until definitive Series D Preferred Stock
certificates are ready for delivery, the Company may prepare and the Transfer
Agent shall countersign temporary Series D Preferred Stock certificates.
Temporary Series D Preferred Stock certificates shall be substantially in the
form of definitive Series D Preferred Stock certificates but may have variations
that the Company considers appropriate for temporary Series D Preferred Stock
certificates. Without unreasonable delay, the Company shall prepare and the
Transfer Agent shall countersign definitive Series D Preferred Stock
certificates and deliver them in exchange for temporary Series D Preferred Stock
certificates.

         (vi) Cancellation. In the event the Company shall purchase or otherwise
acquire shares of Series D Preferred Stock, the certificate(s) representing the
same shall thereupon be delivered to the Transfer Agent for cancellation.

         The Transfer Agent and no one else shall cancel and destroy all Series
D Preferred Stock certificates surrendered for transfer, exchange, replacement
or cancellation and deliver a certificate of such destruction to the Company
unless the Company directs the Transfer Agent to deliver canceled Series D
Preferred Stock certificates to the Company. The Company may not issue new
Series D Preferred Stock certificates to replace Series D Preferred Stock
certificates to the extent they evidence Series D Preferred Stock which the
Company has purchased or otherwise acquired.

         (7) Certain Definitions. As used in this Certificate of Designation,
the following terms shall have the following meanings (and (1) terms defined in
the singular have comparable meanings when used in the plural and vice versa,
(2) "including" means including without limitation, (3) "or" is not exclusive,
(4) "to" any date means to and including such date and (5) an accounting term
not otherwise defined has the meaning assigned to it in accordance with United
States generally accepted accounting principles as in effect on the Issue Date
and all accounting calculations will be determined in accordance with such
principles), unless the content otherwise requires:

         "Business Day" means each day which is not a Legal Holiday.

         "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated. whether
voting or non-voting) in equity of such Person, whether now outstanding or
issued after the Issue Date, including all Common Stock and Preferred Stock.

         "Common Stock" means the Company's common stock, par value $0.001 per
share.

         "Dividend Period" means such period between two consecutive Dividend
Payment Dates and the period from the Issue Date to the first Dividend Payment
Date.

                                       32
<PAGE>

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Holders" means the registered holders from time to time of the Series
D Preferred Stock.

         "Issue Date" means the date on which the Series D Preferred Stock is
initially issued.

         "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.

         "Officer" means the Chairman of the Board of Directors, the President,
any Vice President, the Treasurer, the Secretary, any Assistant Secretary or
Assistant Treasurer of the Company.

         "Officers' Certificate" means a certificate signed by two Officers.

         "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Transfer Agent. The counsel may be an employee of or counsel
to the Company or the Transfer Agent.

         "person" or "Person" means any individual, corporation, partnership,
joint venture, limited liability company, association, joint-stock company,
trust, unincorporated organization, governmental or any agency or political
subdivision thereof or any other entity.

         "Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the Issue Date, including all series and
classes of such preferred or preference stock.

         "SEC" or "Commission" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Series C Preferred Stock" means the 1,250,000 shares of the Company's
Preferred Stock which, as of the Issue Date, have been designated as the Series
C Convertible Preferred Stock.

         "Subsidiary" means with respect to any Person, any corporation,
association or other business entity of which Voting Stock representing more
than 50% of the voting power of shares of outstanding Voting Stock is owned,
directly or indirectly, by such Person, or one or more other Subsidiaries of
such Person.

         "Transfer Agent" means the transfer agent for the Series D Preferred
Stock appointed by the Company, which initially shall be Continental Stock
Transfer and Trust Company.

                                       33
<PAGE>

         "Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.

         (8) SEC Reports and Reports to Holders. So long as any shares of Series
D Preferred Stock remain outstanding, the Company will file with the SEC
(whether or not the Company is required to do so) all such reports and other
information as the Company would be required to file with the SEC pursuant to
Section 13(a) or 15(d) of the Exchange Act. Upon the written request of a Holder
of Series D Preferred Stock, the Company will supply to such Holder, at no cost
to such Holder, copies of such reports or other information.





                    [Signature Page follows on the next page]




                                       34
<PAGE>



         IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be signed by its Chief Executive Officer and President, and
attested to by its Secretary, on June 27, 2001.

                                         MPOWER HOLDING CORPORATION



                                         By: /s/ ROLLA P. HUFF
                                            ------------------------------------
                                            Name:  Rolla P. Huff
                                            Title: Chief Executive Officer
                                                   and President


Attest:

/s/ RUSSELL I. ZUCKERMAN
-----------------------------
Name:  Russell I. Zuckerman
Title: Senior Vice President,
       General Counsel and Secretary



                                         Sworn to this 27th day of June, 2001



                                         By /s/ KAREN A. KOCH
                                            ------------------------------------
                                                Notary Public


                                       35
<PAGE>


                                    EXHIBIT A

                        FORM OF SERIES D PREFERRED STOCK


                                FACE OF SECURITY


Certificate Number: [   ]
Number of Shares of Series D Preferred Stock:  [   ]
CUSIP NO.:  [   ]

              7.25% Series D Cumulative Convertible Preferred Stock
                          (par value $0.001 per share)
                    (liquidation preference $50.00 per share)

                                       of

                           Mpower Holding Corporation

         Mpower Holding Corporation, a Delaware corporation (the "Company"),
hereby certifies that [_______________] (the "Holder") is the registered owner
of fully paid and non-assessable preferred securities of the Company designated
the 7.25% Series D Cumulative Convertible Preferred Stock (par value $0.001 per
share) (liquidation preference $50.00 per share) (the "Series D Preferred
Stock"). The shares of Series D Preferred Stock 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 Series D Preferred Stock represented hereby are issued and shall
in all respects be subject to the provisions of the Certificate of Designation
of Series D Cumulative Convertible Preferred Stock dated [_______], 2001, as the
same may be amended from time to time (the "Certificate of Designation").
Capitalized terms used herein but not defined shall have the meaning given them
in the Certificate of Designation. The Company will provide a copy of the
Certificate of Designation to a Holder without charge upon written request to
the Company at its principal place of business.

         Reference is hereby made to select provisions of the Series D Preferred
Stock 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.

         This certificate is not valid unless countersigned and registered by
the Transfer Agent.



                                      A-1
<PAGE>


         IN WITNESS WHEREOF, the Company has executed this certificate this [ ]
day of [ ], 2001.

                                             MPOWER HOLDING CORPORATION



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

[Seal]

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

                                      A-2
<PAGE>


                               REVERSE OF SECURITY



         Dividends on each share of Series D Preferred Stock shall be payable at
a rate per annum set forth in the face hereof or as provided in the Certificate
of Designation. Dividends may be paid in cash or in shares of Common Stock of
the Company, at the option of the Company.

         The shares of Series D Preferred Stock shall be redeemable as provided
in the Certificate of Designation and in the Certificate. The shares of Series D
Preferred Stock shall be convertible into the Company's Common Stock in the
manner and according to the terms set forth in the Certificate of Designation.

         As required under Delaware law, the Company shall furnish to any Holder
upon request and without charge, a statement setting forth in full or
summarizing the voting powers, designations, preferences, limitations,
restrictions and relative rights of the various classes of stock of the Company
or series thereof. All such requests should be directed to Mpower Holding
Corporation, 175 Sully's Trail, Pittsford, New York 14534, Attention: General
Counsel.


                                      A-3
<PAGE>

                                  ASSIGNMENT


                  FOR VALUE RECEIVED, the undersigned assigns and transfers the
shares of Series D Preferred Stock 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 shares of Series D Preferred Stock evidenced hereby on the
books of the 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 Series D Preferred
Stock Certificate)

Signature

Guarantee:1
            -------------------------------------------------------------------





----------
1        (Signature must be guaranteed by an "eligible guarantor institution"
         that is, a bank, stockbroker, savings and loan association or credit
         union meeting the requirements of the Transfer Agent, 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 Transfer Agent in
         addition to, or in substitution for, STAMP, all in accordance with the
         Securities Exchange Act of 1934, as amended.)



                                      A-4
<PAGE>

                                    EXHIBIT B

                              NOTICE OF CONVERSION

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

The undersigned hereby irrevocably elects to convert (the "Conversion") shares
of 7.25% Series D Cumulative Convertible Preferred Stock (the "Series D
Preferred Stock"), represented by stock certificate No(s). _________ (the
"Series D Preferred Stock Certificates") into shares of Common Stock ("Common
Stock") of Mpower Holding Corporation (the "Company") according to the
conditions of the Certificate of Designation of the Series D Preferred Stock
(the "Certificate of Designation"), as of the date written below. 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 payment of all applicable taxes or evidence that such taxes have been
paid. No fee will be charged to the holder for any conversion, except for
transfer taxes, if any. A copy of each Series D Preferred Stock Certificate is
attached hereto (or evidence of loss, theft or destruction thereof).*

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

Date of Conversion:____________________

Conversion Price:______________________

Number of shares of Series D Preferred Stock to be Converted:________

Number of shares of' Common Stock to be Issued:___________________

Signature:__________________________

Name:_____________________________

Address: ** ________________________

Fax No.: ___________________________


----------

*        The Company is not required to issue shares of Common Stock until the
         original Series D Preferred Stock Certificate(s) (or evidence of loss,
         theft or destruction thereof and indemnity reasonably satisfactory, to
         the Company and the Transfer Agent) to be converted are received by the
         Company or its Transfer Agent. The Company shall issue and deliver
         shares of Common Stock by hand or by delivery to an overnight courier
         not later than three business days following receipt of the original
         Series D Preferred Stock Certificate(s) to be converted.

**       Address where shares of Common Stock and any other payments or
         certificates shall be sent by the Company.




                                      B-1