<PAGE>

                                                                   Exhibit 99.1

               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
                                       OF
                      SERIES A CONVERTIBLE PREFERRED STOCK
                                       OF
                             CELERITY SYSTEMS, INC.

         Celerity Systems, Inc. (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 by the Certificate of Incorporation of the Company, and pursuant to the
General Corporation Law of' the State of Delaware, the Board of Directors of the
Company at a meeting duly held, adopted resolutions (i) authorizing a series of
the Company's authorized preferred stock, $.001 par value per share, and (ii)
providing for the designations, preferences and relative, participating,
optional or other fights, and the qualifications, limitations or restrictions
thereof, of 50 shares of Series A Convertible Preferred Stock of the Company, as
follows:

         RESOLVED, that the Company is authorized to issue 50 shares of Series A
Convertible Preferred Stock (the "SERIES A PREFERRED SHARES"), $.001 par value
per share, which shall have the following powers, designations, preferences and
other special rights:

(1) DIVIDENDS. The Series A Preferred Shares shall not bear any dividends.

(2)  HOLDER'S CONVERSION OF SERIES A PREFERRED SHARES. A holder of Series A
Preferred Shares shall have the right, at such holder's option, to convert
the Series A Preferred Shares into shares of the Company's common stock,
$.001 par value per share (the "COMMON STOCK"), on the following terms and
conditions:

         (a) CONVERSION RIGHT. Subject to the provisions of Sections 2(g), and
3(a) below, at any time or times on or after the earlier of (i) 90 days after
the Issuance Date (as defined herein), (ii) 5 days after receiving a "no-review"
status from the U.S. Securities and Exchange Commission (the "SEC") in
connection with a registration statement ("REGISTRATION STATEMENT") covering the
resale of Common Stock issued upon conversion of the Series A Preferred Shares
and required to be filed by the Company

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<PAGE>

pursuant to the Registration Rights Agreement between the Company and its
initial holders of Series A Preferred Shares (the "REGISTRATION RIGHTS
AGREEMENT"), (iii) the date that the Registration Statement is declared
effective by the U.S. Securities and Exchange Commission (the "SEC") any holder
of Series A Preferred Shares shall be entitled to convert any Series A Preferred
Shares into fully paid and nonassessable shares (rounded to the nearest whole
share in accordance with Section 2(h) below) of Common Stock, at the Conversion
Rate (as defined below); provided, however, that in no event other than upon a
Mandatory Conversion pursuant to Section 2(g) hereof, or upon a Triggering Event
pursuant to Section 6(e) hereof, shall any holder be entitled to convert Series
A Preferred Shares in excess of that number of Series A Preferred Shares which,
upon giving effect to such conversion, would cause the aggregate number of
shares of Common Stock beneficially owned by the holder and its affiliates to
exceed 4.9% of the outstanding shares of the Common Stock following such
conversion. For purposes of the foregoing proviso, the aggregate number of
shares of Common Stock beneficially owned by the holder and its affiliates shall
include the number of shares of Common Stock issuable upon conversion of the
Series A Preferred Shares with respect to which the determination of such
proviso is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (i) conversion of the remaining, non-converted
Series A Preferred Shares beneficially owned by the holder and its affiliates.
Except as set forth in the preceding sentence, for purposes of this paragraph,
beneficial ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended,

         (b) CONVERSION RATE. The number of shares of Common Stock issuable upon
conversion of each of the Series A Preferred Shares pursuant to Section (2)(a)
shall be determined according to the following formula (the "CONVERSION RATE");

                         (.06)(N/365)(10,000) + 10,000
                         -----------------------------
                                CONVERSION PRICE

For purposes of this Certificate of Designations, the following terms shall have
the following meanings:

         (i) "CONVERSION PRICE" Means as, of any Conversion Date (as defined
below), the lower of the Fixed Conversion Price and the Floating Conversion
Price, each in effect as of such date, if applicable, and subject to adjustment
as provided herein;

         (ii) "FIXED CONVERSION PRICE" means $ 1.40 subject to adjustment, as
provided herein.

         (iii) "FLOATING CONVERSION PRICE" Means, as of any date of
determination, the amount obtained by multiplying the Conversion Percentage in
effect as of such date by the Average Market Price for the Common Stock for the
five (5) consecutive trading days immediately preceding such date;


                                       2
<PAGE>

         (iv) "CONVERSION PERCENTAGE" means 75% as adjusted as described herein;

         (v) "AVERAGE MARKET PRICE" means, with respect to any security for any
period, that price which shall be computed as the arithmetic average of the
Closing Bid Prices (as defined below) for such security for each trading day in
such period;

         (vi) "CLOSING BID PRICE" means, for any security as of any date, the
last closing bid price on the Nasdaq Small Cap (the "NASDAQ-SMALL CAP") as
reported by Bloomberg Financial Markets ("BLOOMBERG"), or, if the Nasdaq-NM is
not the principal trading market for such security, the last closing bid price
of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing
do not apply, the last closing sale price of such security in the
over-the-counter market on the pink sheets or bulletin board for such security
as reported by Bloomberg, or, if no closing sale price is reported for such
security by Bloomberg, the last closing trade price of such security as reported
by Bloomberg. If the Closing Bid Price cannot be calculated for such security on
such date on any of the foregoing bases, the Closing Bid Price of such security
on such date shall be the fair market value as reasonably determined in good
faith by the Board of Directors of the Company (all as appropriately adjusted
for any stock dividend, stock split or other similar transaction during such
period); and

         (vii) "N" means the number of days from, but excluding, the Issuance
Date through and including the Conversion Date for the Series A Preferred Shares
for which conversion is being elected.

         (viii) "ISSUANCE DATE" means the date of issuance of the Series A
Preferred Shares.

         (c) PENALTY - REGISTRATION STATEMENT. If the Registration Statement is
not declared effective by the SEC on or before the one hundred and ninety fifth
(195th) day following the Issuance Date (the "SCHEDULED EFFECTIVE DATE"), or if
after the Registration Statement has been declared effective by the SEC, sales
cannot be made pursuant to the Registration Statement (whether because of a
failure to keep the registration Statement effective, to disclose such
information as is necessary for sales to be made pursuant to the Registration
Statement, to register sufficient shares of Common Stock or otherwise), then, as
partial relief for the damages to any holder by reason of any such delay in or
reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall not be exclusive of any other remedies at law or in equity), the
Conversion Percentage and the Fixed Conversion Price shall be adjusted as
follows:

         (i) the Company will pay as liquidated damages ( the "LIQUIDATED
         DAMAGES") in penalties to the Buyer(s) a cash amount within three (3)
         business days of the end of the month equal two percent (2%) for the
         first month and three percent (3%) per month thereafter of the
         liquidation Value equal of the shares outstanding as Liquidated
         Damages. (For


                                       3
<PAGE>

         example, if the Registration Statement becomes effective one (l) month
         after the Scheduled Effective Date, the Company will pay in cash to
         the Buyer(s) Ten Thousand ($10,000) dollars in Liquidated Damages
         (2.0% of 500,000) if, as a further example, thereafter sales could not
         be made pursuant to the Registration Statement for a period of one and
         one half (1 1/2) months, the Company will pay in cash to the Buyer(s)
         Seventeen Thousand Five Hundred ($17,500) dollars in Liquidated
         Damages ($10,000 for the first month plus $7,500 for the half of
         second month), and if, as a further example, thereafter sales could
         not be made pursuant to the Registration Statement for a period of two
         (2) months, the Company will pay in cash to the Buyer(s) Twenty Five
         Thousand ($25,000) dollars in Liquidated Damages ($10,000 for the
         first month plus $15,000 for the second month); and

         (d) ADJUSTMENT TO CONVERSION PRICE - DILUTION AND OTHER EVENTS. In
order to prevent dilution of the rights granted under this Certificate of
Designations, the Conversion Price will be subject to adjustment from time to
time as provided in this Section 2(d).

         (i) ADJUSTMENT OF FIXED CONVERSION PRICE UPON SUBDIVISION OR
         COMBINATION OF COMMON STOCK. If the Company at any time subdivides (by
         any stock split, stock dividend, re-capitalization or otherwise) one or
         more classes of its outstanding shares of Common Stock into a greater
         number of shares, the Fixed Conversion Price in effect immediately
         prior to such subdivision will be proportionately reduced. If the
         Company at any time combines (by combination, reverse stock split or
         otherwise) one or more classes of its outstanding shares of Common
         Stock into a smaller number of shares, the Fixed Conversion Price in
         effect immediately prior to such combination will be proportionately
         increased.

         (ii) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER, OR SALE.
         Any recapitalization, reorganization reclassification, consolidation,
         merger, sale of all or substantially all of the Company's assets to
         another Person (as defined below) or other similar transaction which is
         effected in such a way that holders of Common Stock are entitled to
         receive (either directly or upon subsequent liquidation) stock,
         securities or assets with respect to or in exchange for Common Stock is
         referred to herein as in "Organic Change." Prior to the consummation of
         any Organic Change, the Company will make appropriate provision (in
         form and substance reasonably satisfactory to the holders of a majority
         of the Series A Preferred Shares then outstanding) to insure that, upon
         the consummation of such Organic Change, each of the holders of the
         Series A Preferred Shares will thereafter have the right to acquire and
         receive in lieu of the Series A Shares, such shares of stock,
         securities or assets as Maybe issued or payable with respect to or in
         exchange for the number of shares of Common Stock immediately
         theretofore acquirable and receivable upon the conversion of such
         holder's Series A Preferred Shares had such Organic Change not taken
         place. In any such case, the Company will make appropriate provision
         (in form and substance reasonably satisfactory to


                                       4
<PAGE>

         the holders of a majority of the Series A Preferred Shares then
         outstanding) with respect to such holders' rights and interests to
         insure that the provisions of this Section 2(d) and Section 2(e) below
         will thereafter be applicable to the Series A Preferred Shares. For
         purposes of this Agreement, "PERSON" shall mean an individual, a
         limited liability company, a partnership, a joint venture, a
         corporation, a trust, an unincorporated organization and a government
         or any department or agency thereof.

         (iii) NOTICES.

         (A) Immediately upon any adjustment of the Conversion Price, the
         Company will give written notice thereof to each holder of Series A
         Preferred Shares, setting forth in reasonable detail and certifying the
         calculation of such adjustment.

         (B) The Company will give written notice to each holder of Series A
         Preferred Shares at least twenty (20) days prior to the date on which
         the Company closes its books or takes a record (I) with respect to any
         dividend or distribution upon the Common Stock, (II) with respect to
         any pro rata subscription offer to holders of Common Stock or (III) for
         determining rights to vote with respect to any Organic Change,
         dissolution or liquidation.

         (C) The Company will also give written notice to each holder of Series
         A Preferred Shares at least twenty (20) days prior to the date on which
         any Organic Change, Major Transaction (as defined below), dissolution
         or liquidation will take place.

         (e) PURCHASE RIGHTS. If at any time the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "PURCHASE RIGHTS"), then the holders of Series A Preferred
Shares will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such holder could have acquired if
such holder had held the number of shares of Common Stock acquirable upon
complete conversion of the Series A Preferred Shares immediately before the date
an which a record is taken for the grant issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

         (f) MECHANICS OF CONVERSION. Subject to the Company's inability to
fully satisfy its obligations under a Conversion Notice (as defined below) as
provided for in Section 5 below:

         (i) HOLDER'S DELIVERY REQUIREMENTS. Subject to Section 2(a), in order
         convert Series A Preferred Shares into full shares of Common Stock on
         any date (the "CONVERSION DATE"), the holder thereof shall (A) deliver
         or transmit by facsimile, for receipt on or prior to 11:59 p.m.,
         Eastern Standard Time, on such date, a copy of a fully executed notice
         of



                                       5
<PAGE>

         conversion in the form attached hereto as Exhibit I (the "CONVERSION
         NOTICE") to the Company or its designated transfer agent (the "TRANSFER
         AGENT"), and (B) surrender to a common carrier for delivery to the
         Company or the Transfer Agent as soon as practicable following such
         date, the original certificates representing the Series A Preferred
         Shares being converted (or an indemnification undertaking with respect
         to such shares in the case of their loss, theft or destruction) (the
         "PREFERRED STOCK CERTIFICATES") and the originally executed Conversion
         Notice. Upon such conversion by any such holders the 5% per annum
         premium which has accrued shall be payable hereunder shall be paid in
         cash or common stock (based upon the Conversion Price) at such time at
         the election of each of the holders.

         (ii) COMPANY'S RESPONSE. Upon receipt by the Company of a facsimile
         copy of a Conversion Notice, the Company shall immediately send, via
         Facsimile, a confirmation of receipt of such Conversion Notice to such
         holder. Upon receipt by the Company or the Transfer Agent of the
         Preferred Stock Certificates to be converted pursuant to a Conversion
         Notice, together with the originally executed Conversion Notice, the
         Company or the Transfer Agent (as applicable) shall, within ten (10)
         business days following the date of receipt, (A) issue and surrender to
         a common carrier for overnight delivery to the address as specified in
         the Conversion Notice, a certificate, registered in the name of the
         holder or its designee, for the number of shares of Common Stock to
         which the holder shall be entitled or {B) credit the aggregate number
         of shares of Common Stock to which the holder shall be entitled to the
         holder's or its designee's balance account at The Depository Trust
         Company.

         (iii) DISPUTE RESOLUTION. In the case of a dispute as to the
         determination of the Average Market Price or the arithmetic calculation
         of the Conversion Rate, the Company shall promptly issue to the holder
         the number of shares of Common Stock that is not disputed and shall
         submit the disputed determinations or arithmetic calculations to the
         holder via facsimile within three (3) business days of receipt of such
         holder's Conversion Notice. If such holder and the Company are unable
         to agree upon the determination of the Average Market Price or
         arithmetic calculation of the Conversion Rate within two (2) business
         days of such disputed determination or arithmetic calculation being
         submitted to the holder, then the Company shall within one (1) business
         day submit via facsimile (A) the disputed determination of the Average
         Market Price to an independent, reputable investment bank or (B) the
         disputed arithmetic calculation of the Conversion Rate to its
         independent, outside accountant. The Company shall cause the investment
         bank or the accountant, as the case Maybe, to perform the
         determinations or calculations and notify the Company and the holder of
         the results no later than forty-eight (48) hours from the time it
         receives the disputed determinations or calculations. Such investment


                                       6
<PAGE>

         bank's or accountant's determination or calculation, as the ease Maybe,
         shall be binding upon all parties absent manifest error.

         (iv) RECORD HOLDER. The person or persons entitled to receive the
         shares of Common Stock issuable upon a conversion of Series A Preferred
         Shares shall be treated for all purposes as the record holder or
         holders of such shares of Common Stock following such conversion.

         (v) COMPANY'S FAILURE TO TIMELY CONVERT. If the Company shall fail to
         issue to a holder within seven (7) business days following the date of
         receipt by the Company or the Transfer Agent of the Preferred Stock
         Certificates to be converted pursuant to a Conversion Notice, a
         certificate for the number of shares of Common Stock to which such
         holder is entitled upon such holder's conversion of Series A Preferred
         Shares, in addition to all other available remedies which such holder
         Maypursue hereunder and. under the Securities Purchase Agreement
         between the Company and the initial holders of the Series A Preferred
         Shares (the "SECURITIES PURCHASE AGREEMENT") (including indemnification
         pursuant to Section 8 thereof), the Company shall pay additional
         damages to such holder on each day after the seven (7th) business day
         following the date of receipt by the Company or the Transfer Agent of
         the Preferred Stock Certificates to be converted pursuant to the
         Conversion Notice, for which such conversion is not timely effected, an
         amount calculated in accordance with the following schedule:

<TABLE>

<CAPTION>

                                                   LATE PAYMENT FOR EACH
         PRINCIPAL AMOUNT BEING                   SERIES A PREFERRED SHARE
         NO. BUSINESS DAYS LATE                          CONVERTED
<S>                                         <C>
                   1                                        $100
                   2                                        $200
                   3                                        $300
                   4                                        $400
                   5                                        $500
                   6                                        $600
                   7                                        $700
                   8                                        $800
                   9                                        $900
                   10                                      $1,000
                   11                               $1,000+$200 for each
                                               Business Day Late Beyond 10 days
</TABLE>


         (g) MANDATORY CONVERSION. If any Series A Preferred Shares remain
outstanding on August 31, 2002, then all such Series A Preferred Shares shall be
converted as of such date in accordance with this Section 2 as if the holders of
such Series A Preferred Shares


                                       7
<PAGE>

had given the Conversion Notice on August 31, 2002, and the Conversion Date had
been fixed as of August 31, 2002, for all purposes of this Section 2, and all
holders of Series A Preferred Shares shall thereupon and with two (2) business
days thereafter surrender all Preferred Stock Certificates, duly endorsed for
cancellation, to the Company or the Transfer Agent. No person shall thereafter
have any rights in respect of Series A Preferred Shares, except the right to
receive shares of Common Stock on conversion thereof as provided in this Section
2.

         (h) FRACTIONAL SHARES. The Company shall not issue any fraction of a
share of Common Stock upon any conversion. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one share of the Series
A Preferred Shares by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of a fraction of
a share of Common Stock. If, after the aforementioned aggregation, the issuance
would result in the issuance of a fraction of it share of Common Stock, the
Company shall round such fraction of a share of Common Stock up or down to the
nearest whole share.

(3) COMPANY'S RIGHT TO REDEEM AT ITS ELECTION.

         (a) At any time, commencing 120 days after the Issuance Date, as long
         as the Company has not breached any of the representations, warrants,
         and covenants contained herein or in any related agreements, the
         Company shall have the right, in it sole discretion, to redeem
         ("REDEMPTION AT COMPANY'S ELECTION"), from time to time, any or all of
         the Series A Preferred Stock: provided (i) Company shall first provide
         thirty (30) days advance written notice as provided in subparagraph
         3(a)(ii) below (which can be given any time on or after 90 days after
         the Issuance Date, and (ii) that the Company shall only be entitled to
         redeem Series A Preferred Stock having an aggregate Stated Value (as
         defined below) of at least One Hundred Thousand Dollars ($100,000). If
         the Company elects to redeem some, but not all, of the Series A
         Preferred Stock, the Company shall redeem a pro-rata amount from each
         Holder of the Series A Preferred Stock.

                  (i) REDEMPTION PRICE AT COMPANY'S ELECTION. The "REDEMPTION
                  PRICE AT COMPANY'S ELECTION" shall be calculated as 125% of
                  the Liquidation Value, as that term is defined in Section 9
                  hereof.

                  (ii) MECHANICS OF REDEMPTION AT COMPANY'S ELECTION. The
                  Company shall effect each such redemption by giving at least
                  thirty (30) days prior written notice ("NOTICE OF REDEMPTION
                  AT COMPANY'S ELECTION") to (A) the holders of the Series A
                  Preferred Stock selected for redemption at the address and
                  facsimile number of such holder appearing in the Company's
                  Series A Preferred Stock register and (B) the Transfer Agent,
                  which Notice of Redemption At Company's Election shall be
                  deemed to have been delivered three (3) business days after
                  the


                                       8
<PAGE>

                  Company's mailing (by overnight or two (2) day courier,
                  with a copy by facsimile) of such Notice of Redemption at
                  Company's Election. Such Notice of Redemption At Company's
                  Election shall indicate (i) the number of shares of Series A
                  Preferred Stock that have been selected for redemption, (ii)
                  the date which such redemption is to become effective (the
                  "DATE OF REDEMPTION AT COMPANY'S ELECTION") and (iii) the
                  applicable Redemption Price At Company's Election, as defined
                  in subsection (a)(i) above. Notwithstanding the above, a
                  holder Mayconvert into Common Stock, prior to the close of
                  business on the Date of Redemption at Company's Election, any
                  Series A Preferred Stock which it is otherwise entitled to
                  convert, including Series A Preferred Stock that has been
                  selected for redemption at Company's election pursuant to this
                  subsection 3(a).

         (b) COMPANY MUST HAVE IMMEDIATELY AVAILABLE FUNDS OR CREDIT FACILITIES.
         The Company shall not be entitled to send any Notice of Redemption at
         Company's Election and begin the redemption procedure under Sections
         3(a) unless it has:

                  (i) the full amount of the redemption price to cash, available
                  in a demand or other immediately available account in a bank
                  or similar financial institution; or

                  (ii) immediately available credit facilities, in the full
                  amount of the redemption price with a bank or similar
                  financial institution, or

                  (iii) an agreement with a standby underwriter willing to
                  purchase from the Company a sufficient number of shares of
                  stock to provide proceeds necessary to redeem any stock that
                  is not converted prior to redemptions; or

                  (iv) a combination of the items set forth in (i), (ii), and
                  (iii) above, aggregating the full amount of the redemption
                  price.

         (c) PAYMENT OF REDEMPTION PRICE. Each Holder submitting Preferred Stock
         being redeemed under this Section 3 shall send their Series A Preferred
         Stock Certificates to be redeemed to the Company or its Transfer Agent,
         and the Company shall pay the applicable redemption price to that
         Holder within five (5) business days of the Date of Redemption at
         Company's Election.

(4)      REDEMPTION AT OPTION OF HOLDERS.

         (a) REDEMPTION OPTION UPON MAJOR TRANSACTION. In addition to all other
         rights of the holders of Series A Preferred Shares contained herein,
         after a Major Transaction (as defined below), the holders of Series A
         Preferred Shares shall


                                       9
<PAGE>

         have the right in accordance with Section 4(f), at the option of the
         holders of at least two-thirds (2/3) of the Series A Preferred Shares
         then outstanding, to require the Company to redeem all of the Series A
         Preferred Shares then outstanding at a price per Series A Preferred
         Share equal to the greater of (i) 100% of the Liquidation Value (as
         defined below) of such share and (ii) the price calculated in
         accordance with the Redemption Rate (as defined below) calculated as
         of the date of the public announcement of such Major Transaction or
         the next date on which the exchange or market on which the Common
         Stock is traded in open if such public announcement is made (A) after
         1:00 p.m. Eastern Standard Time on such date or (B) on a date on which
         the exchange or market on which the Common Stock is traded is closed.

         (b) REDEMPTION OPTION UPON TRIGGERING EVENT. In addition to all other
         rights of the holders of Series A Preferred Shares contained herein,
         after a Triggering Event (as defined below), the holders of Series A
         Preferred Shares shall have the right in accordance with Section 4(g),
         at the option of the holders of at least two-thirds (2/3) of the Series
         A Preferred Shares then outstanding, to require the Company to redeem
         all of the Series A Preferred Shares then outstanding at a price per
         Series A Preferred Share equal to the greater of (i) 125% of the
         Liquidation Value of such share and (ii) the price calculated in
         accordance with the Redemption Rate as of the date immediately
         preceding such Triggering Event on which the exchange or market on
         which the Common Stock is traded is open.

         (c) "REDEMPTION RATE." The "REDEMPTION RATE" shall, as of any date of
         determination, be equal to (i) the Conversion Rate in effect as of such
         date as calculated pursuant to Section 2(b) multiplied by (ii) the
         Closing Bid Price of the Common Stock on such date.

         (d) "MAJOR TRANSACTION." A "MAJOR TRANSACTION" shall be deemed to have
         occurred at such time as any of the following events:

                    (i) the consummation of any merger, reorganization,
                    restructuring, consolidation, or similar transaction by or
                    involving the Company except (A) a merger or consolidation
                    where the Company is the survivor, or where the holders of
                    the capital stock of the Company immediately prior to such
                    merger or consolidation own at least 50% of the outstanding
                    capital stock of the surviving entity, (B) pursuant to a
                    migratory merger effected solely for the purpose of changing
                    the jurisdiction of incorporation of the Company, or (C) any
                    such transaction in which each of the holders of the Series
                    A Preferred Shares receives cash at least equal to 125% of
                    the Liquidation Value of such shares in accordance with
                    Section 2(d)(ii) hereof;

                   (ii) sale of all or substantially all of the assets of the
                   Company on a consolidated basis or any similar transaction or
                   related


                                       10
<PAGE>

                   transactions which effectively results in a sale of
                   all or substantially all of the assets of the Company on a
                   consolidated basis, unless, upon consummation of such
                   transaction, the Company reserves an amount in cash at least
                   equal to 125% of the Liquidation Value of the Series A
                   Preferred Shares for payment to the holders thereof.


         (e) "TRIGGERING EVENT." A "TRIGGERING EVENT" shall be deemed to have
         occurred at such time as any of the following events:

                  (i) either (A) the failure of the Registration Statement to be
                  effective or to cover the resale of all of the shares of
                  Common Stock issued or issuable upon conversion of the Series
                  A Preferred Shares at any time after ninety (90) days after
                  the Scheduled Effective Date (provided that for purposes of
                  determining the Closing Bid Price under Section 4(c) above,
                  the Triggering Event shall be deemed to have occurred on the
                  first day of such 60-day period) or (B) for any period of
                  ninety (90) consecutive days after the date that is ninety
                  (90) days after the Scheduled Effective Date that Common Stock
                  issued or issuable upon conversion of the Series A Preferred
                  Shares cannot be sold under the Registration Statement for any
                  reason (provided that for purposes of determining the Closing
                  Bid Price under Section 4(c) above, the Triggering Event shall
                  be deemed to have occurred on the first day of such 60-day
                  period);

                  (ii) if for any reason the Company fails to perform or observe
                  any covenant, agreement, or other provision contained in
                  Section 9 or 10 hereof;

                  (iii) the Company's notice to the holders of Series A
                  Preferred Shares as a class, including by way of public
                  announcement, at any time, of its intention not to comply,
                  other than in accordance with the terms hereof, with requests
                  for conversion of any Series A Preferred Shares for shares of
                  Common Stock;

                  (iv) if for any reason the Company fails to perform or observe
                  any covenant, agreement, or other provision contained herein
                  or in the Securities Purchase Agreement, the Registration
                  Rights Agreement, or in any related agreement, and such
                  failure is not cured within 30 days after the Company knows,
                  or should have known with the exercise of reasonable
                  diligence, of the occurrence thereof, and such failure has
                  had, or could reasonably be expected to have, a material
                  adverse effect on (A) the financial condition, operating
                  results, business, properties, or operations of the


                                       11
<PAGE>

                  Company and its subsidiaries taken as a whole taking into
                  account any proceeds reasonably expected to be received by
                  the Company or its subsidiaries in the foreseeable future
                  from insurance policies or rights of indemnification or (B)
                  the Series A Preferred Shares; or

                  (v) any representation or warranty contained in the Securities
                  Purchase Agreement or the Registration Rights Agreement is
                  false or misleading on or as of the date made and which either
                  reflects or has had a material adverse effect on and which,
                  upon the date that the holders require the Company to redeem
                  the Class A Preferred Shares continues to have a material
                  adverse effect on (A) the financial condition, operating
                  results, business, properties, or operations of the Company
                  and its subsidiaries taken as a whole taking into account any
                  proceeds reasonably expected to be received by the Company or
                  its subsidiaries in the foreseeable future from insurance
                  policies or rights of indemnification or (B) the Series A
                  Preferred Shares.

         (f) MECHANICS OF REDEMPTION AT OPTION OF BUYER UPON MAJOR TRANSACTION.
         No sooner than fifteen (15) days nor later than ten (10) days prior to
         the consummation of a Major Transaction, but not prior to the public
         announcement of such Major Transaction, the Company shall deliver
         written notice thereof via facsimile and overnight courier ("NOTICE OF
         MAJOR TRANSACTION") to each holder of Series A Preferred Shares. At any
         time after receipt of a Notice of Major Transaction, the holders of at
         least two-thirds (2/3) of the Series A Preferred Shares then
         outstanding Mayrequire the Company to redeem all of the holders' Series
         A Preferred Shares then outstanding in accordance with Section 4(a) by
         delivering written notice thereof via facsimile and overnight courier
         ("NOTICE OF REDEMPTION AT OPTION OF BUYER UPON MAJOR TRANSACTION") to
         the Company, which Notice of Redemption at Option of Buyer Upon Major
         Transaction shall indicate (i) the number of Series A Preferred Shares
         that such holders are voting in favor of redemption and (ii) the
         applicable redemption price, as calculated pursuant to Section 4(a)
         above. Unless the Company shall fail to fully redeem all of the
         holders's Series A Preferred Shares pursuant to this Section 4, any
         notice delivered by the holder pursuant to this subsection shall be
         irrevocable.

         (g) MECHANICS OF REDEMPTION AT OPTION OF BUYER UPON TRIGGERING EVENT.
         As soon as practicable, but in any event no more than five (5) days
         after the occurrence of a Triggering Event, the Company shall deliver
         written notice thereof via facsimile and overnight courier ("NOTICE OF
         TRIGGERING EVENT") to each holder of Series A Preferred Shares. At any
         time after receipt of a Notice of Triggering Event, the holders of at
         least two-thirds (2/3) of the Series A Preferred Shares then
         outstanding Mayrequire the Company to redeem all of the Series A
         Preferred Shares then outstanding in accordance with Section 4(b) by
         delivering written notice thereof via facsimile and overnight courier
         ("NOTICE OF


                                       12
<PAGE>

         REDEMPTION AT OPTION OF BUYER UPON TRIGGERING EVENT") to
         the Company, which Notice of Redemption at Option of Buyer Upon
         Triggering Event shall indicate (i) the number of Series A Preferred
         Shares that such holders are voting in favor of redemption and (ii) the
         applicable redemption price, as calculated pursuant to Section 4(b)
         above. Unless the Company shall fail to fully redeem all of the
         holders's Series A Preferred Shares pursuant to this Section 4, any
         notice delivered by the holder pursuant to this subsection shall be
         irrevocable.


                  (h) PAYMENT OF REDEMPTION PRICE. Upon the Company's receipt of
                  a Notice(s) of Redemption at Option of Buyer Upon Major
                  Transaction or a Notice(s) of Redemption at Option of Buyer
                  Upon Triggering Event, as the case Maybe, from the holders of
                  at least two-thirds (2/3) of the Series A Preferred Shares
                  then outstanding, the Company shall immediately notify each
                  holder by facsimile of the Company's receipt of such requisite
                  notices necessary to affect a redemption and each holder of
                  Series A Preferred Shares shall thereafter promptly send such
                  holder's Preferred Stock Certificates to be redeemed to the
                  Company or its Transfer Agent. The Company shall pay the
                  applicable redemption price, as calculated pursuant to Section
                  4(a) or 4(b) above, in cash to such holder within thirty (30)
                  days after the Company' receipt of the requisite notices
                  required to affect a redemption; provided that a holder's
                  Preferred Stock Certificates shall have been so delivered to
                  the Company or its Transfer Agent; PROVIDED FURTHER that if
                  the Company is unable to redeem all of the Series A Preferred
                  Shares, the Company shall redeem an amount from each holder of
                  Series A Preferred Shares equal to such holder's pro-rata
                  amount (based on the number of Series A Preferred Shares held
                  by such holder relative to the number of Series A Preferred
                  Shares outstanding) of all Series A Preferred Shares being
                  redeemed. If the Company shall fail to redeem all of the
                  Series A Preferred Shares submitted for redemption (other than
                  pursuant to a dispute as to the determination of the Closing
                  Bid Price or the arithmetic calculation of the Redemption
                  Rate), the applicable redemption price payable in respect of
                  such unredeemed Series A Preferred Shares shall bear interest
                  at the rate of 2.5% per month (prorated for partial months)
                  until paid in full. Until the Company pays such unpaid
                  applicable redemption price in full to each holder, holders of
                  at least two-thirds (2/3) of the Series A Preferred Shares
                  then outstanding, including shares of Series A Preferred
                  Shares submitted for redemption pursuant to this Section 4 and
                  for which the applicable redemption price has not been paid,
                  shall have the option (the "VOID OPTIONAL REDEMPTION OPTION")
                  to, in lieu of redemption, require the Company to promptly
                  return to each holder all of the Series A Preferred Shares
                  that were submitted for redemption by such holder under this
                  Section 4 and for which the applicable redemption price has
                  not been paid, by sending written notice thereof to the
                  Company via facsimile (the "VOID OPTIONAL REDEMPTION NOTICE").
                  Upon the Company's receipt of such Void Optional


                                       13
<PAGE>

                  Redemption Notice(s) and prior to payment of the full
                  applicable redemption price to each holder, (i) the
                  Notice(s) of Redemption at Option of Buyer Upon Triggering
                  Event or the Notice(s) of Redemption at Option of Buyer Upon
                  Major Transaction, as the case Maybe, shall be null and void
                  with respect to those Series A Preferred Shares submitted
                  for redemption and for which the applicable redemption price
                  has not been paid, (ii) the Company shall immediately return
                  any Series A Preferred Shares submitted to the Company by
                  each holder for redemption under this Section 4(i) and for
                  which the applicable redemption price had not been paid,
                  (iii) the Fixed Conversion Price of such returned Series A
                  Preferred Shares shall be adjusted to the lesser of (A) the
                  Fixed Conversion Price as in effect on the date on which the
                  Void Option Redemption Notice(s) is delivered to the Company
                  and (B) the lowest Closing Bid Price during the period
                  beginning on the date on which the Notice(s) of Redemption
                  of Option of Buyer Upon Major Transaction or the Notice(s)
                  of Redemption at Option of Buyer Upon Triggering Event, as
                  the case Maybe, is delivered to the Company and ending on
                  the date on which the Void Optional Redemption Notice(s) is
                  delivered to the Company; PROVIDED that no adjustment shall
                  be made if such adjustment would result in an increase of
                  the Fixed Conversion Price then in effect, and (iv) the
                  Conversion Percentage in effect at such time and thereafter
                  shall be reduced by a number of percentage points equal to
                  the product of (A) two and one-half (2.5) and (B) the number
                  of months (prorated for partial months) in the period
                  beginning on the date on which the Notice(s) of Redemption
                  at Option of Buyer Upon Major Transaction or the Notice(s)
                  of Redemption at Option of Buyer Upon Triggering Event, as
                  the case Maybe, is delivered to the Company and ending on
                  the date on which the Void Optional Redemption Notice(s) is
                  delivered to the Company. Notwithstanding the foregoing, in
                  the event of a dispute as to the determination of the
                  Closing Bid Price or the arithmetic calculation of the
                  Redemption Rate, such dispute shall be resolved pursuant to
                  Section 2(f)(iii) above with the term "CLOSING BID PRICE"
                  being substituted for the term "AVERAGE MARKET PRICE" and
                  the term "REDEMPTION RATE" being substituted for the term
                  "CONVERSION RATE."


 (5)     INABILITY TO FULLY CONVERT.

         (a) HOLDER'S OPTION IF COMPANY CANNOT FULLY CONVERT. If at any time
         after the earlier to occur of (i) effectiveness of the Registration
         Statement or (ii) ninety (90) days after the Scheduled Effective Date,
         upon the Company's receipt of a Conversion Notice, the Company does not
         issue shares of Common Stock which are registered for resale under the
         Registration Statement within seven (7) business days of the time
         required in accordance with Section 2(t) hereof, for any reason or for
         no reason, including, without limitation, because the Company (x) does
         not have a sufficient number of shares of Common Stock authorized and


                                       14
<PAGE>

         available, (y) is otherwise prohibited by applicable law or by the
         roles or regulations of any stock exchange, inter-dealer quotation
         system or other self-regulatory organization with jurisdiction over the
         Company or its Securities from issuing all of the Common Stock which is
         to be issued to a holder of Series A Preferred Shares pursuant to a
         Conversion Notice or (z) fails to have a sufficient number of shares of
         Common Stock registered and eligible for resale under the Registration
         Statement, then the Company shall issue as many shares of Common Stock
         as it is able to issue in accordance with suck holder's Conversion
         Notice and pursuant to Section 2(f) above and, with respect to the
         unconverted Series A Preferred Shares, the holder, solely at such
         holder's option, can, in addition to any other remedies such holder
         Mayhave hereunder, under the Securities Purchase Agreement (including
         indemnification under Section 8 thereof), under the Registration Rights
         Agreement, at law or in equity, elect to:

                  ii) require the Company to redeem from such holder those
                  Series A Preferred Shares for which the Company is unable to
                  issue Common Stock in accordance with such holder's Conversion
                  Notice ("MANDATORY REDEMPTION") at a price per Series A
                  Preferred Share (the "MANDATORY REDEMPTION PRICE") equal to
                  the greater of x) 120% of the Liquidation Value of such share
                  and (y) the Redemption Rate as of such Conversion Date;

                  (ii) if the Company's inability to fully convert Series A
                  Preferred Shares is pursuant to Section 5(a)(z) above, require
                  the Company to issue restricted shares of Common Stock in
                  accordance with such holder's Conversion Notice and pursuant
                  to Section 2i(f) above; or

                  (iii) void its Conversion Notice and retain or have returned,
                  as the case Maybe, the nonconverted Series A Preferred Shares
                  that were to be converted pursuant to such holder's Conversion
                  Notice.

(6) REISSUANCE OF CERTIFICATES. In the event of a conversion or redemption
pursuant to this Certificate of Designations of less than all of the Series A
Preferred Shares represented by a particular Preferred Stock Certificate, the
Company shall promptly cause to be issued and delivered to the holder of such
Series A Preferred Shares a Preferred stock certificate representing the
remaining Series A Preferred Shares which have not been so converted or
redeemed.

(7) RESERVATION OF SHARES. The Company shall, so long as any of the Series A
Preferred Shares are outstanding, reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of effecting the
conversion of the Series A Preferred Shares, such shares of the Common Stock as
shall from time to time be sufficient to affect the conversion of all of the
Series A Preferred Shares. If at any time, the Company does not have available
an amount of authorized and unissued shares of Common Stock necessary to satisfy
full conversion of all of the Series A Preferred Shares outstanding, the Company
shall call and hold a special shareholders meeting with thirty


                                       15
<PAGE>

(30) days of such occurrence, for the sole purpose of increasing the number of
shares authorized. Furthermore, management of the Company shall recommend to the
shareholders to vote in favor of increasing the number of common shares
authorized. Management shall also vote all of its Shares in favor of increasing
the number of shares of Common Stock authorized.

(8) VOTING RIGHTS, Holders of Series A Preferred Shares shall have no voting
rights, except as required by law, including but not limited to the General
Corporation Law of the State of Delaware and as expressly provided in this
Certificate of Designations.

(9) LIQUIDATION, DISSOLUTION, WINDING-UP. In the event of any voluntary or
involuntary liquidation, dissolution, or winding up of the Company, the holders
of the Series A Preferred Shares shall be entitled to receive in cash out of the
assets of the Company, whether from capital or from earnings available for
distribution to its stockholders (the "PREFERRED FUNDS"), before any amount
shall be paid to the holders of any of the capital stock of the Company of any
class junior in rank to the Series A Preferred Shares in respect of the
preferences as to the distributions and payments on the liquidation, dissolution
and winding up of the Company, an amount per Series A Preferred Share equal to
the sum off (i) $ 10,000 and (ii) an amount equal to the product of (.06)
(N/365) ($10,000) (such sum being referred to as the "LIQUIDATION VALUE");
provided that, if the Preferred Funds are insufficient to pay the full amount
due to the holders of Series A Preferred Shares and holders of shares of other
classes or series of preferred stock of the Company that are of equal rank with
the Series A Preferred Shares as to payments of Preferred Funds (thc "PARI PASSU
SHARES"), then each holder of Series A Preferred Shares and Pari Passu Shares
shall receive a percentage of the Preferred Funds equal to the full amount of
Preferred Funds payable to such holder as a liquidation preference, in
accordance with their respective Certificate of Designations, Preferences and
Rights as a percentage or the full amount of Preferred Funds payable to ail
holders of Series A Preferred Shares and Pari Passu Shares. The purchase or
redemption by the Company of stock of any class in any manner permitted by law,
shall not for the purposes hereof, be regarded as a liquidation, dissolution or
winding up of the Company. Neither the consolidation or merger of the Company
with or into any other Person, nor the sale or transfer by the Company of less
than substantially ail of its assets, shall, for the purposes hereof, be deemed
to be a liquidation, dissolution or winding up of the Company. No holder of
Series A Preferred Shares shall be entitled to receive any amounts with respect
thereto upon any liquidation, dissolution or winding up of the Company other
than the amounts provided for herein.

(10) PREFERRED RATE. All shares of Common Stock shall be of junior rank to all
Series A Preferred Shares in respect to the preferences as to distributions and
payments upon the liquidation, dissolution, and winding up of the Company. The
rights of the shares of Common Stock shall be subject to the Preferences and
relative rights of the Series A Preferred Shares. The Series A Preferred Shares
shall be of greater than any Series of Common or Preferred Stock hereinafter
issued by the Company. Without the prior express written consent of the holders
of not less than two-thirds (2/3) of the then outstanding Series A Preferred
Shares, the Company shall not hereafter authorize or issue


                                       16
<PAGE>

additional or other capital stock that is of senior or equal rank to the Series
A Preferred Shares in respect of the preferences as to distributions and
payments upon the liquidation, dissolution and winding up of the Company.
Without the prior express written consent of the holders off not less than
two-thirds (2/3) of the then outstanding Series A Preferred Shares, the Company
shall not hereafter authorize or make any amendment to the Company's Certificate
of Incorporation or bylaws, or make any resolution of the board of directors
with the Delaware Secretary of State containing any provisions, which would
adversely affect or otherwise impair the rights or relative priority of the
holders of the Series A Preferred Shares relative to the holders of the Common
Stock or the holders of any other class of capital stock. In the event of the
merger or consolidation of the Company with or into another corporation, the
Series A Preferred Shares shall maintain their relative powers, designations,
and preferences provided for herein and no merger shall result inconsistent
therewith.

(11)     RESTRICTION ON REDEMPTION AND DIVIDENDS.

         (a) RESTRICTION ON DIVIDEND. If any Series A Preferred Shares are
outstanding, without the prior express written consent of the holders of not
less than two-thirds (2/3) of the then outstanding Series A Preferred Shares,
the Company shall not directly or indirectly declare, pay or make any dividends
or other distributions upon any of the Common Stock so long as written notice
thereof has been given to holders of the Series A Preferred Shares at least 30
days prior to the earlier of (a) the record date taken for or (b) the payment of
any such dividend or other distribution. Notwithstanding the foregoing, this
Section 10(a) shall not prohibit the Company from declaring and paying a
dividend in cash with respect to the Common Stock so long as the Company: (i)
pays simultaneously to each holder of Series A Preferred Shares an amount in
cash equal to the amount such holder would have received had all of such
holder's Series A Preferred Shares been converted to Common Stock pursuant to
Section 2 hereof one business day prior to the record date for any such
dividend, and (ii) after giving effect to the payment of any dividend and any
other payments required in connection therewith including to the holders of the
Series A Preferred Shares under clause 10(a)(i) hereof, the Company has in cash
or cash equivalents an amount equal to the aggregate of: (A) all of its
liabilities reflected on its most recently available balance sheet, (B) the
amount of any indebtedness incurred by the Company or any of its subsidiaries
since its most recent balance sheet and (C) 125% of the amount payable to all
holders of any shares of any class of preferred stock of the Company assuming a
liquidation of the Company as the date of its most recently available balance
sheet.

         (b) RESTRICTION ON REDEMPTION. If any Series A Preferred Shares are
outstanding, without the prior express written consent of the holders of not
less than two-thirds (2/3) of the then outstanding Series A Preferred Shares,
the Company shall not directly or indirectly redeem, purchase or otherwise
acquire from any person or entity' other than from a direct or indirect
wholly-owned subsidiary of the Company, or permit any subsidiary of the Company
to redeem, purchase or otherwise acquire from any person or entity other than
from the Company or another direct or indirect wholly-owned subsidiary of the
Company, any of the Company's or any subsidiary's capital stock or other equity


                                       17
<PAGE>

securities (including, without limitation, warrants, options and other rights to
acquire such capital stock or other equity securities).

(12) VOTE TO CHANGE THE TERMS OF SERIES A PREFERRED SHARES. The affirmative vote
at a meeting duly called for such purpose or the written consent without a
meeting, of the holders of not less than two-thirds (2/3) of the then
outstanding Series A Preferred Shares, shall be required for any change to this
Certificate of Designations or the Company's Certificate of Incorporation which
would amend, alter, change or repeal any of the powers, designations,
preferences and rights of the Series A Preferred Shares.

(13) LOST OR STOLEN CERTIFICATES. Upon receipt by the Company of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Preferred Stock Certificates representing the Series A Preferred Shares, and, in
the case of loss, theft or destruction, of any indemnification undertaking by
the holder to the Company and, in the case of mutilation, upon surrender and
cancellation of the Preferred Stock Certificate(s), the Company shall execute
and deliver new preferred stock certificate(s) of like tenor and date; provided,
however, the Company shall not be obligated to re-issue preferred stock
certificates if the holder contemporaneously requests the Company to convert
such Series A Preferred Shares into Common Stock.

(14) WITHHOLDING TAX OBLIGATIONS. Notwithstanding anything herein to the
contrary, to the extent that the Company receives advice in writing from its
counsel that there is a reasonable basis to believe that the Company is required
by applicable federal laws or regulations and delivers a copy of such written
advice to the holders of the Series A Preferred Shares so effected, the Company
Mayreasonably condition the making of any distribution (as such term is defined
under applicable federal tax law and regulations) in respect of any Series A
Preferred Shares on the holder of such Series A Preferred Shares depositing with
the Company an amount of cash sufficient to enable the Company to satisfy its
withholding tax obligations (the "WITHHOLDING TAX") with respect to such
distribution, Notwithstanding the foregoing or anything to the contrary, if any
holder of the Series A Preferred Shares so effected receives advice in writing
from its counsel that there is a reasonable basis to believe that the Company is
not so required by applicable federal laws or regulations and delivers a copy of
such written advice to the Company, the Company shall not be permitted to
condition the making of any such distribution in respect of any Series A
Preferred Share on the holder of such Series A Preferred Shares depositing with
the Company any Withholding Tax with respect to such distribution, PROVIDED,
HOWEVER, the Company Mayreasonably condition the making of any such distribution
in respect of any Series A Preferred Share on the holder of such Series A
Preferred Shares executing and delivering to the Company, at the election of the
holder, either: (i) if applicable, a properly completed Internal Revenue Service
Form 4224, or (a) an indemnification agreement in reasonably acceptable form,
with respect to any federal tax liability, penalties and interest that Maybe
imposed upon the Company by the Internal Revenue Service as a result of the
Company's failure to withhold in connection with such distribution to such
holder. If the conditions in the preceding two sentences are fully satisfied,
the Company shall not be required to pay any additional damages set forth in
Section 2(f)(v) of this Certificate of Designations if its failure to timely
deliver any



                                       18
<PAGE>

Conversion Shares results solely from the holder's failure to deposit any
withholding tax hereunder or provide to the Company an executed indemnification
agreement in the form reasonably satisfactory to the Company.





IN WITNESS WHEREOF, the Company has caused this Certificate of Designations to
be signed by Kenneth D. Van Meter, its President and Chief Executive Officer, as
of the 31st day of August, 2000.

CELERITY SYSTEMS, INC.

By:_________________________
Name: Kenneth D. Van Meter
Title: President & Chief Executive Officer

                                       19