EXHIBIT 10.2



                            HQ GLOBAL HOLDINGS, INC.

                           CERTIFICATE OF DESIGNATIONS

                     ESTABLISHING AND FIXING THE RIGHTS AND
              PREFERENCES OF A SERIES OF SHARES OF PREFERRED STOCK

                            Under Section 151 of the
                        Delaware General Corporation Law

    HQ Global Holdings, Inc., a Delaware corporation (the "Corporation"),
certifies that:

First: Pursuant to the authority expressly vested in the Board of Directors of
the Corporation by Section 4.1(b) of its Certificate of Incorporation, as
heretofore amended (which, as hereafter restated or amended from time to time,
are together with this Certificate of Designations herein called the
"Certificate of Incorporation"), the Board of Directors has, by resolution, duly
designated and classified 367,899.386 shares of the preferred stock of the
Corporation into a series designated Series B Convertible Cumulative Preferred
Stock and has provided for the issuance of such series.

Second: The preferences, rights, voting powers, restrictions, limitations,
qualifications and terms and conditions of redemption or conversion of the
shares of such series of preferred stock, which upon any restatement of the
Certificate of Incorporation shall be included as part of Section 4.1(b) of the
Certificate of Incorporation, are as follows:

                 SERIES B CONVERTIBLE CUMULATIVE PREFERRED STOCK

(1)  Designation and Number.
     ----------------------

     A series of preferred stock of the Corporation ("Preferred Stock"),
designated the "Series B Convertible Cumulative Preferred Stock" (the "Series B
Preferred"), is hereby established. The number of shares of the Series B
Preferred shall be, and shall not exceed, 367,899.386.

(2)  Rank.
     ----

     The Series B Preferred will, with respect to dividend rights and rights
upon liquidation, dissolution or winding up of the Corporation, rank: (a) senior
to all classes or series of the common stock of the Corporation (the "Common
Stock"), and to all equity securities issued by the Corporation the terms of
which provide that such equity securities shall rank junior to such Series B
Preferred; (b) on a parity with all equity securities issued by the Corporation
other than those referred to in clauses (a) and (c) of this Section 2; and (c)
junior to the Series A Convertible Cumulative Preferred Stock of the Corporation
(the "Series A Preferred"). The term "equity securities" shall not include
convertible or exchangeable debt securities but shall include any equity
securities into which such debt securities have been converted or for which such
debt securities have been exchanged.

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(3)  Dividends.
     ---------

     (a) Holders of the shares of Series B Preferred shall be entitled to
receive dividends, when, as and if authorized by the Board of Directors, equal
to the Dividend Rate multiplied by the Liquidation Amount per share of Series B
Preferred. The "Dividend Rate" shall mean 18% per annum initially and shall
increase by an amount equal to 0.50% per annum on May 31, 2002 and on each
annual anniversary date thereafter until November 30, 2011 or earlier
redemption, conversion or Liquidation, as applicable; provided, however, that
the "Dividend Rate" shall equal the Default Dividend Rate during any period (1)
commencing on the 90th day following any Dividend Payment Date on which the
Corporation has failed to pay the dividend on such Dividend Payment Date,
assuming the Corporation still has not paid such dividend by such 90th day
following such Dividend Payment Date, and ending on the date on which such
dividend is paid, and (2) a default dividend rate is payable in respect of the
Series A Preferred other than as a result of any dividend arrearage. Payment in
respect of all dividends so declared shall occur upon each Dividend Payment Date
by increasing the Liquidation Amount for each share of the Series B Preferred on
such Dividend Payment Date by an amount equal to the dollar amount of the
dividends declared with respect to such share. Holders of the Series B Preferred
shall not be entitled to cash dividends in respect of dividend payments.

     (b) Dividends on the Series B Preferred shall be cumulative from June 29,
2001 and shall be payable semiannually in arrears on May 31 and November 30 of
each year or, if not a Business Day, the next succeeding Business Day,
commencing November 30, 2001 (each, a "Dividend Payment Date"). Any dividend
payable on the Series B Preferred for a partial dividend period will be computed
on the basis of a 360-day year consisting of twelve 30-day months.

     (c) No dividends on the Series B Preferred shall be authorized by the Board
of Directors of the Corporation or be paid by the Corporation at such time as
the terms and provisions of any agreement of the Corporation, including any
agreement relating to its indebtedness, prohibits such authorization or payment
or provides that such authorization or payment would constitute a breach thereof
or a default thereunder, or if such authorization or payment shall be restricted
or prohibited by law.

     (d) Dividends on the Series B Preferred will accumulate daily at the
Dividend Rate until the date of redemption or conversion of the Series B
Preferred or a Liquidation, whether or not the Corporation has earnings and
whether or not such dividends are authorized or declared. Unpaid dividends shall
compound semiannually from the applicable Dividend Payment Date on which such
dividends were payable until full payment or date of earlier redemption,
conversion or Liquidation, as the case may be.

     (e) If any dividends, other than cash dividends or dividends which are
payable solely in shares of the same class as the shares of equity securities on
which such dividends are declared, are declared by the Board of Directors to be
paid on the Common Stock or other equity securities of the Corporation ranking
junior, as to dividends, to the Series B Preferred, then holders of the

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shares of Series B Preferred as of the close of business on the record date
referred to below shall be entitled to receive an additional dividend (the
"Additional Dividend") in an amount equal to the Special Dividend Amount for
each outstanding share of Series B Preferred. The "Special Dividend Amount"
shall mean the value of the dividends paid in respect of one share of the Common
Stock or other equity securities multiplied by the As Converted Factor. The
Additional Dividend shall be paid in whatever form the dividends are paid to the
holders of Common Stock or other equity securities and the Additional Dividend
shall be paid on the same date as such dividends are paid to the holders of the
Common Stock or such other equity securities. The record date for the payment of
the Additional Dividend to holders of shares of the Series B Preferred shall be
determined by the Board of Directors and shall not be less than five days prior
to the payment date in respect of such Additional Dividend.

     (f) The Corporation shall not authorize, declare or pay any dividend on any
equity securities of the Corporation ranking, as to the payment of dividends or
distribution of assets upon a Liquidation, on a parity with or junior to the
Series B Preferred for any period nor shall any shares of any such equity
securities be purchased, redeemed or otherwise acquired for consideration by the
Corporation, directly or indirectly, unless full dividends have been or
contemporaneously are authorized and paid or authorized and a sum sufficient for
the payment thereof is set apart for such payment, in each case as contemplated
in Section 3(a), on the Series A Preferred for all past dividend periods and the
then current dividend period.

(4)  Liquidation Preference.
     ----------------------

     (a) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation (referred to herein as a "Liquidation"),
the holders of the Series B Preferred will be entitled to be paid out of the
assets of the Corporation legally available for distribution to its stockholders
liquidating distributions, in cash, in an amount equal to the Liquidation
Preference per share to the date of Liquidation, before any distribution or
payment is made to holders of Common Stock or any other equity securities of the
Corporation ranking junior to the Series B Preferred as to the distribution of
assets upon a Liquidation. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series B Preferred will
have no right or claim to any of the remaining assets of the Corporation.
Notwithstanding the foregoing, if an amount (a "Common Liquidation Preference")
equal to the product of (i) the Liquidation Preference per share of Series B
Preferred to the date of Liquidation divided by the Per Share Price, multiplied
by (ii) the per share liquidating distribution to which a holder of one share of
Common Stock would be entitled upon a Liquidation exceeds the Liquidation
Preference per share of Series B Preferred, then, upon a Liquidation, the
holders of the Series B Preferred shall be entitled to receive the Common
Liquidation Preference in respect of each share of Series B Preferred in lieu of
the Liquidation Preference in respect of each share of Series B Preferred.

     (b) In the event that, upon any Liquidation of the Corporation, the
available assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series B Preferred and
the corresponding amounts payable on all other equity securities of the
Corporation ranking on a parity with Series B Preferred in the distribution of
assets upon such Liquidation, then the holders of Series B Preferred and all
other such equity securities shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.

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(5)  Mandatory Redemption; Redemption at Option of Corporation.
     ---------------------------------------------------------

     (a) Shares of Series B Preferred will not be subject to optional redemption
by the Corporation prior to May 31, 2004. On or after May 31, 2004, the
Corporation may redeem shares of the Series B Preferred, in whole or in part,
from time to time, at a redemption price per share which shall equal the product
of (i) the Optional Redemption Percentage multiplied by (ii) the Liquidation
Preference per share of the Series B Preferred to be redeemed to the date of
redemption. The "Optional Redemption Percentage" shall initially equal 105% and
shall decline ratably on each anniversary of May 31, 2004 until May 31, 2007 (in
any case to an amount not less than 100%). The redemption price shall be payable
in cash, upon not less than 30 nor more than 60 days' prior written notice to
the holders of the Series B Preferred.

     (b) All of the outstanding shares of Series B Preferred shall be redeemed
by the Corporation on November 30, 2011 (the "Mandatory Redemption Date") at a
redemption price equal to 100% of the Liquidation Preference per share to the
date of redemption, payable in cash, upon not less than 30 nor more than 60
days' prior written notice to the holders of the Series B Preferred.

     (c) If fewer than all of the outstanding shares of Series B Preferred are
to be redeemed pursuant to Section 5(a), the shares to be redeemed shall be
determined pro rata based on the number of shares of Series B Preferred held by
each holder thereof.

     (d) Notice of optional redemption will be mailed by the Corporation,
postage prepaid, not less than 30 nor more than 60 days prior to the date fixed
for redemption (the " Optional Redemption Date"), addressed to the respective
holders of record of the Series B Preferred to be redeemed at their respective
addresses as they appear on the stock transfer records of the Corporation. Each
notice of redemption shall state: (i) the Optional Redemption Date; (ii) the
number of shares of Series B Preferred to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates representing such shares of
Series B Preferred are to be surrendered for payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease to accumulate on the
Optional Redemption Date (unless the Corporation defaults in the payment of the
redemption price); and (vi) the date upon which the conversion rights with
respect to the Series B Preferred shall terminate. If fewer than all the shares
of Series B Preferred are to be redeemed, the notice mailed to each such holder
thereof shall also specify the number of shares of Series B Preferred to be
redeemed from each such holder.

     (e) At its election, the Corporation, prior to the Optional Redemption Date
or the Mandatory Redemption Date, as applicable, may irrevocably deposit the
cash redemption price (including accumulated and unpaid dividends) of the Series
B Preferred so called for redemption in trust for the holders thereof with a
bank or trust company, in which case the Corporation shall notify the holders of
the Series B Preferred to be redeemed of (i) the date of such deposit, (ii) the
office of such bank or trust company serving as the place of payment of the
redemption price and (iii) the requirement that in order to receive payment on
the Optional Redemption Date or the Mandatory Redemption Date, as the case may
be, such holders surrender the certificates

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representing such Series B Preferred at such place on or prior to the Optional
Redemption Date or the Mandatory Redemption Date, as applicable, against payment
of the redemption price (including all accumulated and unpaid dividends). Any
moneys so deposited which remain unclaimed by the holders of Series B Preferred
at the end of two years after the Optional Redemption Date or the Mandatory
Redemption Date, as applicable, will be returned by such bank or trust company
to the Corporation and the holders of the Series B Preferred shall thereafter
look to the Corporation for the payment of the redemption price.

     (f) No failure to give notice of redemption or any defect thereto or in the
mailing thereof shall affect the validity of the proceedings for the redemption
of any shares of Series B Preferred except as to the holder to whom notice was
defective or not given.

     (g) Holders of the Series B Preferred will be entitled to receive payment
of the redemption price of their shares to be redeemed on or after the Optional
Redemption Date or the Mandatory Redemption Date, as applicable, by presenting
and surrendering the certificates representing such Series B Preferred at the
designated place and thereupon the redemption price of such shares will be paid
to or on the order of the person whose name appears on such certificates as the
owner thereof and each surrendered certificate will be canceled; it being
understood, however, that the Corporation shall not be obligated to pay the
redemption price applicable to any Series B Preferred to be redeemed unless
either (i) the certificates evidencing the shares of Series B Preferred to be
redeemed are delivered to the designated place as provided above or (ii) the
holder thereof notifies the Corporation that such certificates have been lost,
stolen or destroyed and executes an agreement reasonably satisfactory to the
Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. In the event that fewer than all the
outstanding shares of Series B Preferred are to be redeemed, a new certificate
will be issued representing the unredeemed shares.

     (h) From and after the Optional Redemption Date or the Mandatory Redemption
Date (unless the Corporation defaults in payment of the redemption price), all
dividends on the Series B Preferred called for redemption will cease to
accumulate and all rights of the holders thereof, except the right to receive
the redemption price thereof (including all accumulated and unpaid dividends),
will cease and terminate and such shares will not thereafter be transferred
(except with the consent of the Corporation) on the Corporation's records, and
such shares shall not be deemed to be outstanding for any purpose whatsoever.

     (i) Any shares of Series B Preferred that have been redeemed shall, after
such redemption, have the status of authorized but unissued Preferred Stock,
without designation as to series, until such shares are once more designated by
the Board of Directors of the Corporation as part of a series of Preferred Stock
other than Series B Preferred.

     (j) Until May 31, 2004, the Corporation shall not purchase or otherwise
acquire, directly or indirectly, any shares of Series B Preferred (except by
conversion into Common Stock).

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(6)  Voting Rights.
     -------------

     Except as otherwise required by law, holders of the Series B Preferred
shall not be entitled to any voting rights.

(7)  Conversion.
     ----------

     (a) In the event of a merger of, or an initial public offering of Common
Stock by, the Corporation that does not constitute a Qualified Merger or
Qualified Initial Public Offering, respectively (a "Conversion Option Event"),
each holder of the Series B Preferred shall have the option to convert its
shares of Series B Preferred, in whole or in part, into shares of Common Stock
at the Conversion Rate on the date of the consummation of such merger or initial
public offering, as the case may be; provided, however, that no holder of Series
B Preferred shall have the option to convert any shares of Series B Preferred in
respect of which a Redemption Election has been made and not withdrawn in
accordance with Section 8(b) by the close of business on the Business Day prior
to the Redemption Election Payment Date; and provided, further, that the
foregoing right to convert shares of Series B Preferred to be redeemed pursuant
to Section 5 hereof will terminate at the close of business on the Business Day
immediately preceding the Optional Redemption Date or the Mandatory Redemption
Date, as applicable.

     The Corporation shall provide each holder of Series B Preferred with a
summary of the material terms of a proposed merger not less than 45 days prior
to the consummation thereof and shall notify each holder of the Series B
Preferred of its intention to file a registration statement relating to an
initial public offering with the SEC not less than 45 days prior to the filing
date thereof. Each holder of Series B Preferred shall notify the Corporation in
writing of such holder's election not more than 30 days after its receipt of
such summary or notice, as the case may be, from the Corporation and such
holder's election shall be irrevocable for 150 days after its receipt of such
summary or notice, as the case may be, from the Corporation; provided, however,
that any holder shall have the right to rescind its election and either continue
to hold its Series B Preferred or make a Redemption Election if there is any
material change in the Corporation's business or financial condition or in the
Conversion Price occurring prior to the consummation of the proposed merger or
initial public offering, as the case may be, or if the proposed merger or
initial public offering is not consummated within 150 days after its receipt of
such summary or notice, as the case may be, from the Corporation.

     (b) Following the consummation of the transaction resulting in a Conversion
Option Event, holders of shares of Series B Preferred which remain outstanding
shall have the option at any time prior to the occurrence of a Qualified Initial
Public Offering or Qualified Merger to convert all or a portion of such shares
into shares of Common Stock at the Conversion Rate; provided, however, that the
right to convert shares of Series B Preferred to be redeemed pursuant to Section
5 shall terminate at the close of business on the Business Day immediately
preceding the Optional Redemption Date or the Mandatory Redemption Date, as
applicable.

     In case the Corporation shall pay or make any dividend or any other
distribution on any class of capital stock of the Corporation payable in shares
of Common Stock after a Conversion Option Event but prior to a conversion
pursuant to this Section 7(b), the Conversion Rate in effect at the time of such
conversion shall be increased by dividing the Conversion Rate by a

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fraction, the numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date before such dividend or
distribution and the denominator of which shall be the sum of such number of
outstanding shares of Common Stock and the total number of shares constituting
all such dividends or other distributions.

     In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, and such subdivision becomes effective
after a Conversion Option Event but prior to the issuance of shares of Common
Stock upon a conversion pursuant to this Section 7(b), the Conversion Rate in
effect at the time of such conversion shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock and such combination becomes
effective after a Conversion Option Event but prior to such conversion, the
Conversion Rate in effect at the time of such conversion shall be
proportionately reduced.

     If, after a Conversion Option Event but prior to the issuance of shares of
Common Stock upon a conversion pursuant to this Section 7(b), the Corporation
shall sell shares of its Common Stock at a price per share less than the current
market price per share of Common Stock on the date of sale (other than shares of
Common Stock issued (i) pursuant to the Stock Option Plan, (ii) upon exercise of
any warrants to purchase Common Stock of the Corporation, or (iii) upon
conversion of the Series B Preferred), the Conversion Price in effect at the
time of such conversion shall be adjusted to equal the price determined by
multiplying the Conversion Price in effect immediately prior to such sale by a
fraction, the numerator of which shall be the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such sale and (y) the number of
shares of Common Stock which the aggregate consideration received by the
Corporation from such sale would purchase at such current market price and the
denominator of which shall be the sum of (1) the number of shares of Common
Stock outstanding immediately prior to such sale and (2) the number of shares of
Common Stock so sold.

     If, after a Conversion Option Event but prior to the issuance of shares of
Common Stock upon a conversion pursuant to this Section 7(b), the Corporation
shall distribute rights, options or warrants (any such rights, options or
warrants are referred to herein as "Options") or any stock or securities
convertible into or exercisable or exchangeable for Common Stock (other than a
dividend subject to the provisions of the second paragraph of Section 7(b)) (any
such stock or securities are referred to herein as "Convertible Securities") to
the holders of all or at least 75% of the outstanding shares of its Common Stock
entitling them to subscribe for, purchase, convert into or exchange for shares
of Common Stock at a price per share less than the current market price per
share of Common Stock as of the record date for such distribution, the
Conversion Price used in the determination of the Conversion Rate for a
conversion pursuant to this Section 7(b) shall be adjusted to equal the price
determined by multiplying the Conversion Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the sum of (x)
the number of shares of Common Stock outstanding on such record date and (y) the
number of shares of Common Stock which the aggregate consideration receivable by
the Corporation from the exercise of such Options or from the conversion,
exercise or exchange of such Convertible Securities would purchase at such
current market price and the denominator of which shall be the sum of (1) the
number of shares of Common Stock outstanding on such date and (2) the number of
shares of Common Stock so offered for subscription, purchase, conversion,
exercise or exchange. Options or Convertible Securities distributed by the

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Corporation to all holders of its Common Stock entitling the holders thereof to
subscribe for, purchase, convert into or exchange for shares of Common Stock,
which Options or Convertible Securities (i) are deemed to be transferred with
such shares of Common Stock, (ii) are not exercisable and (iii) are also issued
in respect of future issuances of Common Stock, in each case in clauses (i)
through (iii) until the occurrence of a specified event or events ("Trigger
Event"), shall for purposes of this Section 7(b) not be deemed distributed until
the occurrence of the earliest Trigger Event. An adjustment made pursuant to
this Section 7(b) shall be effective immediately after the record date for such
distribution.

     (c) Upon the consummation of a Qualified Initial Public Offering or
Qualified Merger, each share of Series B Preferred shall automatically be
converted into shares of Common Stock at the Conversion Rate. The Corporation
shall provide each holder of Series B Preferred with a summary of the material
terms of a proposed Qualified Initial Public Offering or Qualified Merger not
less than 30 days prior to the consummation thereof. However, the automatic
conversion of the Series B Preferred shall not be contingent upon the
Corporation's delivery of the summary referred to in the preceding sentence.

     (d) In the event that none of a Qualified Merger, Qualified Initial Public
Offering or a Conversion Option Event has occurred prior to the close of
business on the last Business Day immediately preceding the Mandatory Redemption
Date, holders of the Series B Preferred shall have the right to convert their
shares into shares of Common Stock on the Mandatory Redemption Date at the
Conversion Rate.

     Each holder of Series B Preferred electing to convert its shares on the
Mandatory Redemption Date shall notify the Corporation in writing of such
holder's election not less than 45 nor more than 90 days prior to the Mandatory
Redemption Date, whereupon the Corporation shall notify each such holder of the
Conversion Price applicable to such conversion in accordance with clause (iv) of
the definition of Conversion Price not less than 30 days prior to the Mandatory
Redemption Date. Any holder shall have the right to rescind any previous
election to convert upon notice to the Corporation no less than 10 Business Days
prior to the Mandatory Redemption Date.

     (e) Each transferee to whom shares of Series B Preferred shall have been
transferred shall have the option to convert such shares of Series B Preferred
into Common Stock at the Conversion Rate on or prior to the 60th day following
the sale by FCG of Common Stock to any person other than an Affiliate of FCG
(the "Alternative Conversion Date"). Each such transferee holding Series B
Preferred electing to convert its shares on the Alternative Conversion Date
shall notify the Corporation in writing of such holder's election not less than
45 days prior to the Alternative Conversion Date.

     (f) No fractional shares of Common Stock shall be issued upon conversion of
Series B Preferred. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such fraction
multiplied by the then fair market value of such fractional shares as determined
by the Board of Directors of the Corporation in its good faith judgment. If more
than one share of Series B Preferred is surrendered for conversion by the same
holder, the number of full shares of Common Stock issuable upon conversion shall
be computed on the basis of the aggregate number of shares of Series B Preferred
so surrendered.

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     (g) [reserved]



     (h) Before any holder of Series B Preferred shall be entitled to convert
the same into full shares of Common Stock, and to receive certificates therefor,
such holder shall surrender the certificate or certificates therefor, duly
endorsed, at the principal office of the Transfer Agent, and shall give written
notice to the Corporation at such office that it elects to convert the same;
provided, however, that in the event of an automatic conversion pursuant to
Section 7(c) above, the outstanding shares of Series B Preferred shall be
converted automatically without any further action by the holders of such shares
and whether or not the certificates representing such shares are surrendered to
the Transfer Agent. The Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon conversion to any holder of
Series B Preferred, whether such conversion is automatic or at the option of
such holder, unless either (i) the certificates evidencing the shares of Series
B Preferred are delivered to the Transfer Agent as provided above or (ii) the
holder notifies the Transfer Agent that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection with such
certificates.

     The Corporation shall, as soon as practicable after such delivery, or after
such agreement and indemnification, issue and deliver at such office of the
Transfer Agent to such holder of Series B Preferred, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid and a check payable to the holder in the amount of any
cash payable as the result of a conversion into fractional shares of Common
Stock.

     Any such conversion shall be deemed to have been made upon either

     (A) in the case of a conversion pursuant to either Section 7(a), (b) or
         (d), satisfaction of the conditions set forth in such Section and in
         this Section 7(h), or

     (B) a Qualified Initial Public Offering, a Qualified Merger or the
         Alternative Conversion Date, as the case may be,

and the person or persons entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock when the applicable conditions
specified in clauses (i) and (ii) above are satisfied.

     (i) Except as otherwise provided herein with respect to the calculation of
the Liquidation Preference, the Corporation shall make no payment or allowance
for unpaid dividends, whether or not in arrears, on Series B Preferred converted
into Common Stock.

     (j) If any recapitalization, reclassification or reorganization of the
capital stock of the Corporation, or any consolidation or merger of the
Corporation with another corporation, or the sale of all or substantially all of
its assets, shall be effected (an "Organic Change"), and in connection with such
Organic Change the Common Stock shall be converted into common stock of another
entity or another security of the Corporation (a "New Security"), then, as a
condition of such Organic Change, lawful and adequate provisions shall be made
by the Corporation

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whereby (i) if the conversion occurs in connection with such Organic Change, the
holders of the Series B Preferred shall receive (in lieu of the shares of the
Common Stock immediately theretofore receivable upon the conversion rights
contained herein) such shares of New Securities or property as may be issued or
payable with respect to or in exchange for the number of shares of Common Stock
which such holders would have received immediately following such Organic Change
had such holders converted their shares of Series B Preferred into shares of
Common Stock immediately prior to the effective date of such Organic Change at
the Conversion Rate at the time of conversion, and (ii) if the conversion occurs
subsequent to such Organic Change, the Corporation shall make appropriate
provision with respect to the rights and interests of the holders of the Series
B Preferred so that the conversion provisions hereof (and the definition of
Conversion Rate) shall thereafter be applicable to a conversion of the Series B
Preferred into said New Securities. The Corporation will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the
surviving entity (if other than the Corporation) resulting from such
consolidation or merger or the entity purchasing such assets shall assume by
written instrument the obligation to deliver to holders of shares of the Series
B Preferred such shares of common stock or other securities or property as, in
accordance with the foregoing provisions, such holders may be entitled to
receive upon conversion.

     (k) In the event that at any time, as a result of an adjustment made
pursuant to Section 7(j) above, the holder of any shares of Series B Preferred
becomes entitled to receive any shares of capital stock other than Common Stock
of the Corporation, the number and kind of such other shares so receivable shall
thereafter be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions concerning the Common
Stock contained in Section 7(b) and the provisions of this Section 7 shall apply
on like terms to any such other shares.

     (l) If any event occurs as to which the provisions of the second through
fifth paragraphs, inclusive, of Section 7(b) or of Sections 7(j) and (k) are not
strictly applicable or, if strictly applicable, would not, in the good faith
judgment of the Board of Directors of the Corporation, fairly protect the
conversion rights of the holders of the Series B Preferred in accordance with
the essential intent and principles of such provisions, then such Board shall
make such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably necessary, in the
good faith judgment of such Board, to protect the conversion rights as
aforesaid, but in no event shall any such adjustment have the effect of
increasing the Conversion Price or otherwise adversely affecting the holders of
the Series B Preferred.

     (m) The Corporation shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of the Series B Preferred, the full number
of shares of Common Stock then issuable upon the conversion of the Series B
Preferred.

     (n) Except as provided in the next sentence, the Corporation will pay any
and all documentary, stamp or similar issue and transfer taxes and duties that
may be payable in respect of the issue or delivery of shares of Common Stock on
conversion of the Series B Preferred. The Corporation shall not, however, be
required to pay any tax or duty which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name

                                       10

<PAGE>


other than that of the holder of the Series B Preferred or its Affiliates,
and no such issue or delivery shall be made unless and until the person
requesting such issue and delivery has paid to the Corporation the amount of any
such tax or duty, or has established to the satisfaction of the Corporation that
such tax or duty has been paid.

     (o) The Corporation agrees that all shares of Common Stock which may be
delivered upon conversion of the Series B Preferred, upon such delivery, will
have been duly authorized and validly issued, will be fully paid and
nonassessable, will be free and clear of all liens, other than transfer
restrictions relating to federal securities laws, and will not be subject to any
preemptive or similar rights under any provision of applicable law, the
certificate of incorporation or by-laws of the Corporation or any agreement,
contract or instrument to which the Corporation is a party or by which it or any
of its properties or assets are bound (and shall be issued out of the
Corporation's authorized but unissued Common Stock).

     (p) Any shares of Series B Preferred that have been converted shall, after
such conversion, have the status of authorized but unissued Preferred Stock,
without designation as to series, until such shares are once more designated by
the Board of Directors as part of a series of Preferred Stock other than Series
B Preferred.

(8)  Redemption at Option of Holders.
     -------------------------------

     (a) Notwithstanding the provisions of Section 7(a), upon the occurrence of
a Conversion Option Event and subject to the consent, if required pursuant to
the terms thereof, of the holders of any indebtedness of the Corporation for
borrowed money or any indebtedness for borrowed money guaranteed by the
Corporation (which the Corporation agrees to use commercially reasonable
efforts, other than the payment of any fee or other consideration, to obtain),
each holder of Series B Preferred shall have the right to require the
Corporation to redeem for cash (a "Redemption Election") all or a portion of
shares of Series B Preferred owned by such holder on the date of the
consummation of the Conversion Option Event (the "Redemption Election Payment
Date"), at a redemption price per share equal to 100% of the Liquidation
Preference per share to the Redemption Election Payment Date.

     (b) In order for a holder to have its Series B Preferred redeemed on the
Redemption Election Payment Date, such holder shall deliver to the Corporation
(i) notice of such holder's election in writing, not less than 30 days prior to
the Redemption Election Payment Date and (ii) on or prior to 5:00 p.m., New York
City time, on the last Business Day prior to the Redemption Election Payment
Date, at the office of the Transfer Agent, the shares of Series B Preferred to
be redeemed with the form entitled "Option to Elect Redemption" on the reverse
thereof or otherwise accompanying such shares of Series B Preferred duly
completed. Any Redemption Election shall be irrevocable; provided, however, that
any holder shall have the right to rescind its Redemption Election and either
continue to hold its Series B Preferred or make an election to convert its
Series B Preferred pursuant to Section 7(a) if there is any material change in
the Corporation's business or financial condition or in the Conversion Price
occurring prior to the consummation of the Conversion Option Event or if the
Conversion Option Event is not consummated within 150 days after its receipt of
the summary thereof from the Corporation.

                                       11

<PAGE>


     (c) At its election, the Corporation, prior to the Redemption Election
Payment Date, may irrevocably deposit the cash redemption price (including
accumulated and unpaid dividends) of the Series B Preferred to be redeemed in
trust for the applicable holders thereof with a bank or trust company, in which
case the Corporation shall notify the holders of the Series B Preferred to be
redeemed of (i) the date of such deposit, (ii) the office of such bank or trust
company serving as the place of payment of the redemption price and (iii) the
requirement (subject to the right of a holder of Series B Preferred to rescind
its Redemption Election) that such holders surrender the certificates
representing such Series B Preferred at such place on or prior to the Redemption
Election Payment Date against payment of the redemption price (including all
accumulated and unpaid dividends). Any moneys so deposited which remain
unclaimed by the holders of Series B Preferred at the end of two years after the
Redemption Election Payment Date will be returned by such bank or trust company
to the Corporation and the holders thereafter shall look to the Corporation for
payment of the redemption price.

     (d) Subsequent to the satisfaction of the conditions specified in clause
(b), on the Redemption Election Payment Date, the redemption price of the Series
B Preferred to be redeemed will be paid to or on the order of the person whose
name appears on such certificates as the owner thereof and each surrendered
certificate will be canceled; it being understood, however, that the Corporation
shall not be obligated to pay the redemption price applicable to any Series B
Preferred to be so redeemed unless either (i) the certificates evidencing the
shares of Series B Preferred to be so redeemed are delivered as provided above
or (ii) the holder thereof notifies the Corporation that such certificates have
been lost, stolen or destroyed and executes an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. In the event that fewer than all the
outstanding shares of Series B Preferred are to be redeemed, a new certificate
will be issued representing the unredeemed shares.

     (e) From and after the Redemption Election Payment Date (unless the
Corporation defaults in payment of the redemption price), all dividends on the
Series B Preferred actually redeemed will cease to accumulate and all rights of
the holders thereof, except the right to receive the redemption price thereof
(including all accumulated and unpaid dividends), will cease and terminate and
such shares actually redeemed will not thereafter be transferred (except with
the consent of the Corporation) on the Corporation's records, and such shares
actually redeemed shall not be deemed to be outstanding for any purpose
whatsoever.

(9)  Special Provisions Relating to a Default.
     ----------------------------------------

     For so long as the Corporation remains in default with respect to all or
any portion of the redemption price payable in connection with the redemption of
the Series B Preferred on the Mandatory Redemption Date or earlier Redemption
Election Payment Date ("Redemption Default"), in addition to any other remedies
that may be available to holders of shares of Series B Preferred:

          (i)   dividends on the Series B Preferred with respect to which the
                Redemption Default has occurred shall be payable at the Default
                Dividend Rate multiplied by the Liquidation Preference on such
                redemption date; and

                                       12

<PAGE>


          (ii)  no later than 60 days after the end of each fiscal quarter of
                the Corporation, commencing with the first full fiscal quarter
                following the quarter in which the Redemption Default occurs,
                the Corporation shall be required to pay to the holders of the
                Series B Preferred with respect to which the Redemption Default
                has occurred an amount equal to the lesser of (A) 100% of Excess
                Cash Flow for the quarter then ended, and (B) that portion of
                the redemption price which remains unpaid.

(10) Definitions.
     ---------------

     "Additional Dividend" shall have the meaning set forth in Section 3(e).

     "Affiliate" shall mean, with respect to any Person, (i) any Person directly
or indirectly, through one or more intermediaries, controlling, controlled by or
under common control with such Person, or (ii) any officer, director, general
partner, managing member or trustee of such Person or any Person referred to in
clause (i) above. For purposes of this definition, (i) "control," when used with
respect to any Person, means the power, direct or indirect, to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

     "Alternative Conversion Date" shall have the meaning set forth in Section
7(e).

     "As Converted Factor" shall mean the number determined by dividing the
Liquidation Preference per share of Series A Preferred as of the relevant date
by the Per Share Price, provided, however, that

     (A)  in the case of Section 3(e) relating to equity securities of the
          Corporation other than Common Stock, the "As Converted Factor" shall
          mean the number determined by dividing the Liquidation Preference per
          share of Series A Preferred by the liquidation preference of such
          other equity security;

     (B)  if the Corporation shall sell shares of Common Stock pursuant to an
          offering which is not a Qualified Initial Public Offering, then

          (i)  if the price per share in such sale is less than the Per Share
               Price, or

          (ii) if (A) the price per share in such sale is greater than the Per
               Share Price, (B) the gross proceeds to the Corporation from such
               sale are not less than $100 million, and (C) at least 50% of the
               shares of Common Stock in such sale is purchased by investors
               that are not Affiliates of the Corporation or FCG (provided that
               for purposes of this clause (C), an investor purchasing shares of
               Common Stock in such sale who is not otherwise an Affiliate of
               the Corporation or FCG shall not be deemed to be an Affiliate of
               the Corporation or FCG solely by reason of having the right to
               nominate a member of the Corporation's Board of Directors as part
               of the sale consideration),

               the As Converted Factor shall be determined by dividing the
               Liquidation Preference per share by the price per share of
               Common Stock so sold;

                                       13

<PAGE>


          (B)  subsequent to a merger of the Corporation which is not a
               Qualified Merger but prior to any conversion pursuant to Section
               7(b), the As Converted Factor shall be determined by dividing the
               Liquidation Preference per share by the dollar value of the
               consideration paid in respect of each share of Common Stock as
               determined as of the date of the execution of the agreement
               relating to such merger, provided that, if the aggregate value of
               the consideration to be received upon consummation of the merger
               is more than 12.5% below the value of the aggregate consideration
               to be received as calculated on the date of the execution of the
               merger agreement, the As Converted Factor shall be determined by
               dividing the Liquidation Preference per share by the dollar value
               of the aggregate consideration to be received upon consummation
               of the merger;

          (D)  in case the Corporation shall issue additional shares of Common
               Stock of the Corporation or shall pay or make any dividend or
               other distribution on any class of capital stock of the
               Corporation payable in shares of Common Stock, the As Converted
               Factor in effect at such time as the As Converted Factor is
               determined shall be increased by dividing the As Converted Factor
               by a fraction, the numerator of which shall be the number of
               shares of Common Stock outstanding on the last date prior to such
               issuance, dividend or distribution and the denominator of which
               shall be the sum of such number of outstanding shares of Common
               Stock and the total number of shares constituting all such
               dividends, issuances and distributions;

          (E)  in case outstanding shares of Common Stock shall be subdivided
               into a greater number of shares of Common Stock, the As Converted
               Factor shall be proportionately increased, and, conversely, in
               case outstanding shares of Common Stock shall each be combined
               into a smaller number of shares of Common Stock and such
               combination becomes effective prior to the date of the
               determination of the As Converted Factor, the As Converted Factor
               shall be proportionately reduced;

          (F)  if the Corporation shall sell shares of its Common Stock at a
               price per share less than the then current market price per share
               of Common Stock (other than shares of Common Stock issued (i)
               pursuant to the stock option plan adopted by the Corporation in
               accordance with its certificate of incorporation, as amended,
               (ii) upon exercise of any warrants to purchase Common Stock of
               the Corporation, or (iii) upon conversion of the Series A
               Preferred or the Series B Preferred), the number by which the
               Liquidation Preference is divided to determine the As Converted
               Factor shall be adjusted to equal the price determined by
               multiplying such number by a fraction, the numerator of which
               shall be the sum of (x) the number of shares of Common Stock
               outstanding immediately prior to such sale and (y) the number of
               shares of Common Stock which the aggregate consideration received
               by the Corporation from such sale would purchase at such current
               market price and the denominator of which shall be the sum of (1)
               the number of shares of Common Stock outstanding immediately
               prior to such sale and (2) the number of shares of Common Stock
               so sold;

                                       14

<PAGE>


          (G)  if the Corporation shall distribute Options or Convertible
               Securities to the holders of all of its Common Stock entitling
               them to subscribe for, purchase, convert into or exchange for
               shares of Common Stock at a price per share less than the current
               market price per share of Common Stock as of the record date for
               such distribution, the number by which the Liquidation Preference
               is divided to determine the As Converted Factor shall be adjusted
               by multiplying such number by a fraction, the numerator of which
               shall be the sum of (x) the number of shares of Common Stock
               outstanding on such record date and (y) the number of shares of
               Common Stock which the aggregate consideration receivable by the
               Corporation from the exercise of such Options or from the
               conversion, exercise or exchange of such Convertible Securities
               would purchase at such current market price and the denominator
               of which shall be the sum of (1) the number of shares of Common
               Stock outstanding on such date and (2) the number of shares of
               Common Stock so offered for subscription, purchase, conversion,
               exercise or exchange. Options or Convertible Securities
               distributed by the Corporation to all holders of its Common Stock
               entitling the holders thereof to subscribe for, purchase, convert
               into or exchange for shares of Common Stock, which Options or
               Convertible Securities (i) are deemed to be transferred with such
               shares of Common Stock, (ii) are not exercisable and (iii) are
               also issued in respect of future issuances of Common Stock, in
               each case in clauses (i) through (iii) until the occurrence of a
               Trigger Event, shall for purposes of this clause not be deemed
               distributed until the occurrence of the earliest Trigger Event.
               An adjustment made pursuant to this clause shall be effective
               immediately after such record date;

          (H)  if any Organic Change shall be effected, and in connection with
               such Organic Change the Common Stock shall be converted into a
               New Security, then the definition of the As Converted Factor
               shall thereafter be determined in respect of said New Securities
               (after giving effect to such conversion of Common Stock into such
               New Security, assuming the conversion of the Series A Preferred
               into Common Stock immediately prior to such Organic Change);

          (I)  in the event that that at any time, as a result of an adjustment
               made pursuant to Section 7(j), the holder of any shares of Series
               B Preferred becomes entitled to receive, or with the passage of
               time or the occurrence of another event would become entitled to
               receive, a New Security, the number and kind of such other shares
               so receivable shall thereafter, for purposes of determining the
               As Converted Factor, be subject to adjustment from time to time
               in a manner and on terms as nearly equivalent as practicable to
               the provisions set forth in clauses (D) through (H) above; and

          (J)  if any event occurs as to which the foregoing provisions set
               forth in clauses (D) through (I) above are not strictly
               applicable or, if strictly applicable, would not, in the good
               faith judgment of the Board of Directors of the Corporation,
               fairly protect the rights of the holders of the Series B
               Preferred in accordance with the essential intent and principles
               of such provisions, then such Board shall make such adjustments
               in the application of such provisions, in accordance with such

                                       15

<PAGE>


               essential intent and principles, as shall be reasonably
               necessary, in the good faith judgment of such Board, to protect
               such rights as aforesaid, but in no event shall any such
               adjustment have the effect of decreasing the As Converted Factor
               or otherwise adversely affecting the holders of the Series B
               Preferred.

     "Business Day" shall mean any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in The City of
New York are authorized or required by law, regulation or executive order to
close.

     "Capital Expenditures" shall mean all expenditures that should be
capitalized in accordance with generally accepted accounting principles.

     "Certificate of Incorporation" shall have the meaning set forth on page one
herein.

     "Common Stock" shall have the meaning set forth in Section 2.

     "Consolidated Net Income" of the Corporation shall mean net income of the
Corporation and its consolidated subsidiaries as determined in accordance with
generally accepted accounting principles.

     "Conversion Option Event" shall have the meaning set forth in Section 7(a).

     "Conversion Price" shall mean

            (i)    in connection with a Qualified Initial Public Offering or
                   such other initial public offering of equity securities by
                   the Corporation, the dollar amount equal to the price per
                   share at which the related equity securities were initially
                   sold to the public;

            (ii)   in connection with a Qualified Merger or such other merger of
                   the Corporation, the dollar value of the aggregate
                   consideration to be received in respect of each share of
                   Common Stock pursuant to the terms of the Qualified Merger or
                   such other merger as calculated on the date of the execution
                   of the merger agreement, provided that, if the aggregate
                   value of the consideration to be received upon consummation
                   of the merger is more than 12.5% below the value of the
                   aggregate consideration to be received as calculated on the
                   date of the execution of the merger agreement, the Conversion
                   Price shall mean the dollar value of the aggregate
                   consideration to be received upon consummation of the merger;

            (iii)  in connection with a conversion pursuant to Section 7(b), the
                   greater of (A) the dollar amount calculated pursuant to
                   clause (i) or (ii) above, as the case may be, and (B) if the
                   Common Stock is then publicly traded, the average closing
                   price of the Common Stock during the three month period
                   ending on the date on which the election to convert Series B
                   Preferred into Common Stock pursuant to Section 7(b) is made;
                   and

                                       16

<PAGE>


            (iv)   in connection with a conversion pursuant to Section 7(d), the
                   fair market value of the Common Stock as determined no later
                   than 30 days prior to the Mandatory Redemption Date by an
                   independent "bulge bracket" investment banking firm selected
                   by the Corporation and reasonably acceptable to a majority of
                   the holders of the Series B Preferred.

            (v)    in connection with a conversion pursuant to Section 7(e), the
                   dollar price per share at which FCG sold the Common Stock
                   referred to therein.

     "Conversion Rate" shall mean the number of shares of Common Stock issuable
upon conversion of one share of Series A Preferred determined by dividing the
Liquidation Preference per share by the Conversion Price.

     "Convertible Securities" shall have the meaning set forth in Section 7(b).

     "Corporation" shall have the meaning set forth on page one herein.

     "Default Dividend Rate" shall mean, at any time, the sum of the Dividend
Rate then in effect plus 3 percentage points.

     "Dividend Payment Date" shall have the meaning set forth in Section 3(b).

     "Dividend Rate" shall have the meaning set forth in Section 3(a).

     "EBITDA" shall mean earnings of the Corporation and its consolidated
subsidiaries before interest, taxes, depreciation and amortization, each as
determined in accordance with generally accepted accounting principles.

     "Excess Cash Flow" shall mean, for any fiscal quarter of the Corporation,
the excess of

              (a) the sum, without duplication, of (i) EBITDA for such quarter,
          (ii) extraordinary gains or gains from sales of assets, if any, of the
          Corporation or any of its consolidated subsidiaries during such
          quarter and not included in Consolidated Net Income; and (iii)
          reductions to non-cash working capital of the Corporation and its
          consolidated subsidiaries for such quarter, over

              (b) the sum, without duplication, to the extent funded from
          internally generated funds, of (i) the amount of any cash income taxes
          payable by the Corporation and its consolidated subsidiaries with
          respect to such quarter; (ii) cash interest paid by the Corporation
          and its consolidated subsidiaries during such quarter; (iii) Capital
          Expenditures made in cash during such fiscal quarter; (iv) payments of
          Indebtedness at maturity made by the Corporation and its consolidated
          subsidiaries during such quarter; (v) optional and mandatory
          prepayments of the principal of Indebtedness (including any mandatory
          cash flow sweeps) made by the Corporation and its consolidated
          subsidiaries during such quarter; (vi) extraordinary cash losses from
          sales of assets, if any, of the Corporation or any of its consolidated
          subsidiaries during such quarter and not included in Consolidated Net
          Income; and (vii) additions to noncash working capital made by the
          Corporation and its consolidated subsidiaries during such quarter.

                                       17

<PAGE>


     "FCG" shall mean FrontLine Capital Group.

     "Indebtedness" of the Corporation and its consolidated subsidiaries means
(i) any indebtedness, whether or not contingent, in respect of borrowed money
evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness
secured by any mortgage, pledge, lien, charge, encumbrance or any security
interest existing on the property of the Corporation or any of its consolidated
subsidiaries, (iii) any lease of property as lessee which would be reflected on
the Corporation's consolidated balance sheet as a capitalized lease in
accordance with generally accepted accounting principles, (iv) obligations,
contingent or otherwise, in connection with any letters of credit or similar
facilities actually issued, or amounts representing the balance deferred and
unpaid of the purchase price of any property in which the Corporation or any of
its consolidated subsidiaries has a firm, non-contingent purchase obligation,
except any such balance that constitutes an accrued expense or trade payable,
(v) all obligations of the Corporation and its consolidated subsidiaries in
respect of Swaps in the case of items of Indebtedness under (i) through (iv)
above to the extent that any such items (other than letters of credit) would
appear as a liability on the Corporation's consolidated balance sheet in
accordance with generally accepted accounting principles, and (v) any obligation
to be liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), Indebtedness of
another Person.

     "Liquidation" shall have the meaning set forth in Section 4(a).

     "Liquidation Amount" shall mean $40.772017 per share of Series B Preferred
and shall increase by the amount of the per share dividend declared and paid on
any Dividend Payment Date pursuant to Section 3(a).

     "Liquidation Preference" shall mean the amount equal to the Liquidation
Amount as of the relevant date, plus an amount equal to all unpaid dividends
accumulated to such relevant date, whether upon Liquidation, redemption or
conversion, as applicable.

     "Mandatory Redemption Date" shall have the meaning set forth in Section
5(b).

     "Mid-Point Price" shall mean a dollar amount equal to the average of the
minimum and maximum offering prices established by the underwriters for the
offering of the Common Stock as set forth in the final preliminary prospectus
relating to the Qualified Initial Public Offering or such other initial public
offering of equity securities by the Corporation to be filed with the SEC.

     "New Security" shall have the meaning set forth in Section 7(j).

     "Options" shall have the meaning set forth in Section 7(b).

     "Optional Redemption Date" shall have the meaning set forth in Section
5(d).

     "Optional Redemption Percentage" shall have the meaning set forth in
Section 5(a).

                                       18

<PAGE>


     "Organic Change" shall have the meaning set forth in Section 7(j).

     "Per Share Price" shall mean $40.772017.

     "Person" shall mean any natural person, corporation, partnership,
proprietorship, limited liability company, joint venture, trust, unincorporated
organization, other form of business or legal entity or any government or state
(or any subdivision thereof) of or in the United States or any foreign nation,
or any agency, authority, bureau, commission, department or similar body or
instrumentality thereof, or any governmental court or tribunal..

     "Preferred Stock" shall have the meaning set forth on page one herein.

     "Qualified Initial Public Offering" shall mean an initial public offering
of shares of equity securities of the Corporation where

          (i)     the Mid-Point Price is not less than a percentage of the Per
                  Share Price which shall initially equal 115% and which shall
                  increase by 5 percentage points on each anniversary date of
                  May 31, 2001 until May 31, 2004, in any case not to exceed
                  130%; and

          (ii)    gross proceeds to the Corporation are equal to or greater than
                  $100 million.

     "Qualified Merger" shall mean any merger of the Corporation with another
entity the common stock or other equity interests of which are publicly held,
where

          (i)     the common stock or other equity interests of the surviving
                  entity are publicly held,

          (ii)    holders of the Common Stock have a right to receive
                  consideration for their shares in such merger and the dollar
                  value of the aggregate consideration per share received in
                  such merger by holders of the Common Stock, calculated at the
                  time of the consummation of such merger, equals or exceeds a
                  percentage of the Per Share Price which shall initially equal
                  115% and which shall increase by 5 percentage points on each
                  anniversary date of May 31, 2001 until May 31, 2004, in any
                  case not to exceed 130%, and

          (iii)   the market capitalization of the surviving entity is at least
                  $100 million greater than the market capitalization of the
                  Corporation and its subsidiaries immediately prior to such
                  merger.

     "Redemption Default" shall have the meaning set forth in Section 9.

     "Redemption Election" shall have the meaning set forth in Section 8(a).

     "Redemption Election Payment Date" shall have the meaning set forth in
Section 8(a).

                                       19

<PAGE>


     "SEC" shall mean the United States Securities and Exchange Commission.

     "Series A Preferred" shall have the meaning set forth on page one herein.

     "Series B Preferred" shall have the meaning set forth on page one herein.

     "Special Dividend Amount" shall have the meaning set forth in Section 3(e).

     "Stock Option Plan" shall mean the Stock Option Plan adopted by the
Corporation during the fiscal year ended December 2000.

     "Swaps" shall mean payment obligations of the Corporation with respect to
interest rate swaps, currency swaps or similar obligations which are due upon
the termination thereof; provided, however, that if any agreement relating to a
Swap provides for the netting of amounts payable by and to the Corporation
thereunder or if any agreement provides for the simultaneous payment of amounts
by and to the Corporation, then in each case, the amount of such obligation
shall be the net amount determined to be due.


     "Transfer Agent" means American Stock Transfer & Trust Corporation, or such
other agent or agents of the Corporation as may be designated by the Board of
Directors of the Corporation or its designee as the transfer agent for the
Series B Preferred.


     "Trigger Event" shall have the meaning set forth in Section 7(b).

(11) Determinations by the Board of Directors Conclusive.
     ---------------------------------------------------

     Any determination by the Board of Directors pursuant to the terms of the
Series B Preferred shall be final and binding upon the holders thereof and shall
be conclusive for all purposes.

THIRD: The Series B Preferred has been classified and designated by the Board of
Directors under the authority contained in this Certificate of Designations.

FOURTH: This Certificate of Designations has been approved by the Board of
Directors in the manner and by the vote required by law.

FIFTH: This Certificate of Designations shall be effective upon filing with the
Secretary of State.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]







                                       20
<PAGE>


     IN WITNESS WHEREOF, HQ GLOBAL HOLDINGS, INC. has caused these presents to
be signed in its name and on its behalf by its President and its corporate seal
to be hereunto affixed and attested by its Vice President, General Counsel and
Secretary, and the said officers of the Corporation further acknowledge said
instrument to be the corporate act of the Corporation, and state under the
penalties of perjury that, to the best of their knowledge, information and
belief, the matters and facts therein set forth with respect to approval are
true in all material respects.

Dated:  June 29, 2001

                                        HQ GLOBAL HOLDINGS, INC.




                                        By:   /s/ David Rupert
                                           -------------------------------------
                                           Name:  David Rupert
                                           Title: President



         [SEAL]

         ATTEST:


            /s/ Jill Louis
         -------------------------
         Name:  Jill Louis
         Title: Vice President, General Counsel and Secretary






                                       21