<PAGE>

                                                                     Exhibit 3.4

                     STATEMENT OF RIGHTS AND PREFERENCES OF
                     SERIES C CONVERTIBLE PREFERRED STOCK OF
                           THE NATIONAL REGISTRY, INC.

      The undersigned, John Gustafson and David Brogan, hereby certify that:

      I. They are the duly elected and acting President and Secretary,
respectively, of The National Registry Inc., a Delaware corporation (the
"Company").

      II. The Certificate of Incorporation of the Company authorizes 1,000,000
shares of preferred stock, $.01 par value per share, of which 100,000 shares
have been authorized and are issued and outstanding.

      III. The following is a true and correct copy of resolutions duly adopted
by the Board of Directors of the Company (the "Board of Directors") at a meeting
duly held February 4, 1997, which constituted all requisite action on the part
of the company for adoption of such resolutions.

                                   RESOLUTIONS

      WHEREAS, the Board of Directors is authorized to provide for the issuance
of the shares of preferred stock in series, and by filing a certificate pursuant
to the applicable law of the State of Delaware, to establish and issue on or
more series of Preferred Stock with such voting powers, full or limited, or no
voting powers, and such designations, preferences and relative, participating,
optional or other special rights, and with such qualifications, limitations or
restrictions thereon as the Board of Directors may determine.

      WHEREAS, the Board of Directors desires, pursuant to its authority as
aforesaid, to designate a new series of preferred stock, set the number of
shares constituting such series and fix the rights, preferences, privileges and
restrictions of such series.

      NOW, THEREFORE, BE IT RESOLVED, that the Board of Director hereby
designates a new series of preferred stock and the number of shares constituting
such series and fixes the rights, preferences, privileges and restrictions
relating to such series as follows:

      Section 1. Designation, Amount and Par Value. The series of preferred
stock shall be designated as the Series C Convertible Preferred Stock (the
"Preferred Stock"), and the number of shares so designated shall be 350,000
(which shall not be subject to increase). Each
<PAGE>

share of Preferred Stock shall have a par value of $.01 per share and a stated
value of $20 per share (the "Stated Value").

      Section 2. Dividends.

      (a) Holders of Preferred Stock shall be entitled to receive, when and as
declared by the Board of Directors out of funds legally available therefor, and
the company shall pay, cumulative dividends at the rate per share (as a
percentage of the Stated Value per share) equal to 6% per annum, payable, at the
option of the Company in cash or shares of Common Stock, quarterly in arrears,
but in no event later than the Conversion Date (as hereinafter defined)
applicable to such share of Preferred Stock. Dividends on the Preferred Stock
shall accrue daily commencing on the Original Issue Date (as defined in Section
7), and shall be deemed to accrue on such date whether or not earned or declared
and whether or not there are profits, surplus or other funds of the Company
legally available for the payment of dividends. The party that holds the
Preferred Stock on an applicable record date for any dividend payment after the
Board of Directors declared such dividends or on a Conversion Date with respect
to shares of Preferred Stock being converted on such date will be entitled to
receive such dividend payment and any other accrued and unpaid dividends which
accrued prior to such dividend payment date, without regard to any sale or
disposition of such Preferred stock subsequent to the applicable record date but
prior to the applicable dividend payment date. Except as otherwise provided
herein, if at any time the Company pays less than the total amount of dividends
then accrued on account of the Preferred Stock, such payment shall be
distributed ratably among the holders of the Preferred Stock based upon the
number of shares held by each holder on such applicable record date. Payment of
dividends on the Preferred Stock is further subject to the provisions of Section
5(c)(i).

      (b) Notwithstanding anything to the contrary contained herein, the Company
may not issue shares of Common Stock in payment of dividends (and must deliver
cash in respect thereof) on the Preferred Stock if:

            (i) the number of shares of Common Stock at the time authorized,
unissued and unreserved for all purposes, or held as treasury stock, is
insufficient to issue such dividends to be paid in shares of Common Stock;

            (ii) the shares of Common Stock to be issued in respect of such
dividends are not registered for resale pursuant to an effective registration
statement that names the recipient of such dividend as a selling stockholder
thereunder;

            (iii) the shares of Common Stock to be issued in respect of such
dividends are not listed on the Nasdaq SmallCap Market (or Nasdaq National
Market, The American Stock Exchange or The New York Stock Exchange) or any other
exchange or quotation system on which the Common Stock is then listed for
trading; or

                                       2
<PAGE>

            (iv) the issuance of such shares would result in the recipient
thereof beneficially owing, in accordance with Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended, more than 4.9% of the issued and
outstanding shares of Common Stock.

      (c) So long as any Preferred shall remain outstanding, neither the Company
nor any subsidiary thereof shall redeem, purchase or otherwise acquire directly
or indirectly any Junior Securities (as defined in Section 7), nor shall the
Company directly or indirectly pay or declare any cash dividend or make any cash
distribution (other than a dividend or distribution described in Section 5)
upon, nor shall any cash distribution be made in respect of, any Junior
Securities, nor shall any monies be set aside for or applied to the purchase or
redemption (through a sinking fund or otherwise) of any Junior Securities unless
all accrued and unpaid dividends on the Preferred Stock for all past dividend
periods shall have been paid.

      Section 3. Voting Rights. Except as otherwise provided herein and as
otherwise required by law, the Preferred Stock shall have no voting rights.
However, so long as any shares of Preferred Stock are outstanding, the Company
shall not, without the affirmative vote of the holders of a majority of the
shares of the Preferred Stock then outstanding, (a) alter or change adversely
the powers, preferences or rights given to the Preferred Stock or (b) authorize
or create any class of stock ranking as to dividends or distribution of assets
upon a Liquidation (as defined in Section 4), senior to or prior to with the
Preferred Stock.

      Section 4. Liquidation. Upon any liquidation, dissolution or winding-up of
the Company, whether voluntary or involuntary (a "Liquidation"), the holders of
Preferred Stock shall be entitled to receive out of the assets of the Company,
whether such assets are capital or surplus, for each share of Preferred Stock an
amount equal to the Stated Value plus all accrued but unpaid dividends per
share, whether declared or not, before any distribution or payment shall be made
to the holders of any Junior Securities, an dif the assets of the Company shall
be insufficient to pay in full such amounts, then the entire assets to be
distributed to the holders of Preferred Stock shall be distributed among the
holders of Preferred Stock ratably in accordance with the respective amounts
that would be payable on such shares if all amounts payable thereon were paid in
full. A sale, conveyance or disposition of all or substantially all of the
assets of the company or the affectuation by the Company of a transaction or
series of related transactions in which more than 50% of the voting power of the
Company is disposed of, or a consolidation or merger of the Company with or into
any other company or companies shall not be treated as a Liquidation, but
instead shall be subject to the provisions of Section 5. The Company shall mail
written notice of any such Liquidation, not less than 30 days prior to the
payment date stated therein, to each record holder of Preferred Stock.

      Section 5. Conversion.

      (a) (i) Each share of Preferred Stock may be convertible into shares of
Common Stock (subject to reduction pursuant to Section 5(a)(ii) at the
Conversion Ratio (as defined in Section 7) at the option of the holder in whole
or in part as follows: (1) 33% of the shares of Preferred Stock purchased
pursuant to the Purchase Agreement may be converted pursuant to


                                       3
<PAGE>

this Section at any time after 121 days after the Original Issue Date, provided,
however, that a transferee, directly or indirectly, from an original Purchaser
of Preferred Stock may only convert that number of shares of Preferred Stock
that such original Purchaser would be entitled to convert, after considering all
conversions by such Purchaser and all transferees, directly or indirectly, from
such Purchaser, but for such transfer; (2) an additional 33% of the shares of
Preferred Stock owned by any holder thereof (as measured on the Original Issue
Date) may be converted at any time after the date which is 151 days after the
Original Issue Date, provided, however, that a transferee, directly or
indirectly, from an original purchaser of Preferred Stock may only convert that
number of shares of Preferred Stock that such original purchaser would be
entitled to convert, after considering all conversions by such Purchaser and all
transferees, directly or indirectly, from such Purchaser, but for such transfer:
and (3) the balance of the shares of Preferred Stock owned by any holder may be
converted at any time after the date which is 181 days after the Original Issue
Date. The holder shall effect conversions by surrendering the certificate or
certificates representing the shares of Preferred Stock to be converted to the
Company, together with a completed and executed conversion notice substantially
in the form attached hereto as Exhibit A (the "Holder Conversion Notice"). Each
Holder Conversion Notice shall specify the number of shares of Preferred Stock
to be converted and the date on which such conversion is to be effected, which
date may not be prior to the date the holder delivers to the Company such Holder
Conversion Notice by facsimile (the "Holder Conversion Date"). If no Holder
Conversion Date is specified in a Holder Conversion Notice, the Holder
Conversion Date shall be the date that the Holder Conversion Notice is deemed
received pursuant to Section 5(i). Subject to Sections 5(b) and 5(a)(ii) and, as
to the original holder (or its designee), subject to Section 4.8 of the Purchase
Agreement (as defined in Section 7), each Holder Conversion Notice, once given,
shall be irrevocable. If the holder is converting less than all shares of
Preferred Stock represented by the certificate or certificates tendered by the
holder with the Holder Conversion Notice, or if a conversion hereunder cannot be
effected in full for any reason, the Company shall promptly deliver to such
holder (in the manner within the time set forth in Section 5(b)) a certificate
for such number of shares as have not been converted.

            (ii) Certain Regulatory Approval. If on the Holder Conversion Date
applicable to any conversion under this Section 5(a), (A) the Common Stock is
then listed for trading on the Nasdaq National Market or if the rules of the
Nasdaq Stock Market are hereafter amended to extend Rule 4460(i) promulgated
thereby (or any successor or replacement provision thereof) to the Nasdaq
SmallCap Market and such rule is applicable to the Company, (B) the Conversion
Price then in effect is such that the aggregate number of shares of Common Stock
that would then be issuable upon conversion of all outstanding shares of
Preferred Stock, together with any shares of Common Stock previously issued upon
conversion of Preferred Stock, would exceed 20% of the number of shares of
Common Stock outstanding on the Original Issue Date (the "Issuable Maximum"),
and (C) the company has not previously obtained Shareholder Approval (as defined
below), then the Company shall issue to the holder so requesting conversion of
Preferred Stock the Issuable Maximum and, with respect to any shares of Common
Stock that otherwise would have been issuable to such holder in respect of such


                                       4
<PAGE>

Holder Conversion Notice at issue in excess of the Issuable Maximum, the holder
shall have the option to require the Company to either (1) as promptly as
possible, but in no event later than 90 days after such Holder Conversion Date,
convene a meeting of the holders of the Common Stock and obtain the Shareholder
Approval or (2) redeem, from funds legally available therefore at the time of
such redemption, the balance of the Preferred Stock subject to such Holder
Conversion Notice at a price per share equal to the product of (i) the average
Per Share Market Value for the five (5) Trading Days immediately preceding (1)
the applicable Holder Conversion Date or (2) the date of payment in full by the
Company of such redemption price, whichever is greater, and (ii) the Conversion
Ratio calculated on (1) the applicable Holder Conversion Date or (2) the date of
payment by the Company of such redemption price, whichever date yields a lower
Conversion Price denominator for the determination of the Conversion Ratio;
provided, however, that if the holder has requested that the Company obtain
Shareholder Approval under paragraph (1) above and the Company fails for any
reason to obtain such Shareholder Approval within the time period set forth in
(1) above, the Company shall be obligated to redeem the Preferred Stock not
converted as a result of the provisions of this Section in accordance with the
succeeding sentence shall be deemed to accrue from the applicable Holder
Conversion Date. If the holder has requested that the Company redeem shares of
Preferred Stock pursuant to this Section and fails for any reason to pay the
redemption price under (2) above within seven days after the applicable Holder
Conversion Date, the Company will pay interest on such redemption price at a
rate of 10% per annum to the converting holder of Preferred Stock, accruing from
the applicable Holder Conversion Date until the redemption price plus any
accrued interest thereon is paid in full. The entire redemption price, including
interest thereon, shall be paid in cash. "Shareholder Approval" means the
approval by a majority of the total votes cast on the proposal, in person or by
proxy, at a meeting of the shareholders of the Company held in accordance with
the Company's Certificate of Incorporation and by-laws, of the issuance of the
conversion of Preferred Stock into Common Stock at a price less than the greater
of the book or market value on the Original Issue Date as and to the extent
required pursuant to Rule 4460(i) of the Nasdaq Stock Market (or any successor
or replacement provision thereof).

            (b) Not later than three Trading Days after the applicable Holder
Conversion D ate, the Company will deliver to the applicable holder (i) a
certificate or certificates which shall be free of restrictive legends and
trading restrictions (other than those required by the Purchase Agreement)
representing the number of shares of Common Stock being acquired upon the
conversion of shares of Preferred Stock (subject to reduction pursuant to
Section 5(a)(ii) and Section 4.8 of the Purchaser Agreement) and (ii) one or
more certificates representing the number of shares of Preferred Stock not
converted; provided, however, that the Company shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon conversion of
any shares of Preferred Stock until certificates evidencing such shares of
Preferred Stock are either delivered for conversion to the Company or any
transfer agent of the Preferred Stock or Common Stock, or the holder of such
Preferred Stock notifies the Company that such certificates have been lost,
stolen or destroyed and provides a bond (or other adequate security reasonably
acceptable to the Company) reasonably satisfactory to the Company to indemnify
the Company from any loss incurred by it in connection therewith. The Company
shall, upon


                                       5
<PAGE>

request of a holder of the Preferred Stock, use its best efforts to deliver any
certificate or certificates required to be delivered by the Company under this
Section. If such certificate or certificates are not delivered by the date
required under this Section 5(b), the holder shall be entitled by written notice
to the Company at any time on or before its receipt of such certificate or
certificates thereafter, to rescind such conversion, in which event the Company
shall immediately return the certificates representing the shares of Preferred
Stock tendered for conversion. If the Company fails to deliver to the holder
such certificate or certificates representing shares of Common Stock pursuant to
this Section, including for purposes hereof, any shares of Common Stock to be
issued on the applicable Holder Conversion Date on account of accrued but unpaid
dividends hereunder, prior to the fifth Trading Day after the applicable Holder
Conversion Date, except in the case that such failure to deliver certificate(s)
was not in the control of the Company or could not be accomplished without undue
or unreasonable effort or expense, then the Company shall pay to such holder, in
cash, as liquidated damages and not as a penalty, $1,500 for each day after such
fifth Trading Day until such certificate are delivered. If the Company fails to
deliver to the holder such certificate or certificates pursuant to this Section
prior to the 30th day after the applicable Holder Conversion Date, the Company
shall, at such holder's option (i) redeem, from funds legally available therefor
at the time of such redemption, such number of shares of Preferred Stock then
held by such holder as to which such Common Stock certificate(s) were not
delivered timely as required hereby, as requested by such holder, and (ii) pay
all accrued but unpaid dividends on account of the Preferred Stock for which the
Company shall have filed to issue Common Stock certificates hereunder, in cash.
The redemption price per share shall be equal to the product of (A) the average
Per Share Market Value for the five (5) Trading Days immediately preceding (1)
the applicable Holder Conversion Date or (2) the date of payment in full by the
Company of such redemption price, whichever is greater, and (B) the Conversion
Ratio calculated on (1) the Conversion Date or (2) the date of payment by the
Company of such redemption price, whichever date yields a lower Conversion Price
denominator for the determination of the Conversion Ratio. If the holder has
requested that the Company redeem shares of Preferred Stock pursuant to this
Section and the Company fails for any reason to pay the redemption price under
(2) above within seven days after such notice is deemed received by the Company
pursuant to Section 5(i), the Company will pay interest on the redemption price
at a rate of 10% per annum, in cash to such holder, accruing from such seventh
day until the redemption price and any accrued interest thereon is paid in full.

      (c) (i) The conversion price for each share of Preferred Stock (the
"Conversion Price") in effect on any Conversion Date shall be the lesser of (a)
$3.275 (the "Initial Conversion Price"), and (b) 82.5% of the average Per Share
Market Value for the five (5) Trading Days immediately preceding the Conversion
Date (the "Adjustable Conversion Price"); provided that, (a) if the registration
statement contemplated by the Registration Rights Agreement, dated the Original
Issue Date (the "Registration Rights Agreement"), by and between the Company and
the original holders of the Preferred Stock, pursuant to which the Company is,
among other things required to register the resale of the shares of Common Stock
issuable upon conversion of the Preferred Stock (the "Underlying Shares
Registration Statement") is not filed on or prior to the 40th day after the
Original Issue Date, or (b) the


                                      6
<PAGE>

Company fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act of 1933, as
amended or Rule 12d1-2 promulgated under the Securities Exchange Act of 1934, as
amended, or other similar rule, as applicable, within five (5) Business Days of
the date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that an Underlying Shares Registration Statement will
not be "reviewed," or (c) if the Underlying Shares Registration Statement is not
declared effective by the Commission on or prior to the 120th day after the
Original Issue Date (which period shall be extended to 150 days after the
Original Issue Date in the event that the Commission notifies the Company that
the Underlying Shares Registration Statement cannot be filed on Form S-3
promulgated under the Securities Act solely because the shares of Preferred
Stock are convertible or the Warrants are exercisable prior to the 180th day
after the Original Issue Date), or (d) if such Underlying Shares Registration
Statement is filed with and declared effective by the Commission but thereafter
ceases to be effective at any time when a registration statement covering the
Underlying Shares is required to be maintained effective pursuant to the
Registration Rights Agreement prior to the expiration of the "Effectiveness
Period" (as such term is defined in the Registration Rights Agreement), without
being succeeded within 10 Business Days by a subsequent Underlying Shares
Registration Statement or an amendment or supplement to or other action with
respect to the Underlying Shares Registration Statement filed with and declared
effective by the Commission, or (e) if trading in the Common Stock shall be
suspended for any reason on the principal market or exchange for such shares
(other than as a result of the suspension of trading in securities on such
market or exchange generally or temporary suspension pending the release of
material information) for more than three Trading Days (provided, however, that
this paragraph (e) shall not be applicable to a Purchaser if such Purchaser
exercises its rights under Section 4.10 of the Purchase Agreement, or (f) if the
conversion rights of the holders of Preferred Stock hereunder are suspended for
any reason other than due to the fault of a holder of Preferred Stock, in each
case under clauses (b), (d), (e) and (f) if such event occurs on or after the
date which is 121 days after the Original Issue Date (any such failure being
referred to as an "Event," and for purposes of clauses (a), (c) and (f) the date
on which such Event occurs, or for purposes of clause (b) the date on which such
five (5) Business Days period is exceeded, or for purposes of clause (d) the
date which such 10 Business Day period is exceeded, or for purposes of clause
(e) the date on which such three Trading Day period is exceeded, being referred
to as "Event Date"), the Conversion Price shall be decreased by 2.5% each month
(i.e., 80% as of the Event Date and 77.5% as of the one month anniversary of the
Event Date) until the earlier to occur of the second month anniversary after the
Event Date and such time as the applicable Event is cured. Commencing the second
month anniversary after the Event Date, the Company shall pay to the holders of
the Preferred Stock 2.5% of the outstanding amount of Preferred Stock (each
holder being entitled to receive such portion of such amount as equals its pro
rata portion of the Preferred Stock then outstanding) in cash as liquidated
damages, and not as a penalty on the first day of each monthly anniversary of
the Event Date until such time as the applicable Event is cured. Any decrease in
the Conversion Price pursuant to this Section shall continue notwithstanding the
fact that the Event causing such decrease has been subsequently cured. The
provisions of this Section are not exclusive and shall in no way limit the
Company's obligations under the Registration Rights Agreement.


                                       7
<PAGE>

             (ii) If the Company, at any time while any shares of Preferred
Stock are outstanding, (a) shall pay a stock dividend or otherwise made a
distribution or distributions on share of its Junior Securities payable in
shares of common Stock, (b) subdivide outstanding shares of Common Stock into a
larger number of shares, (c) combine outstanding shares of Common Stock into a
smaller number of shares, or (d) issue by reclassification of shares of Common
Stock any shares of capital stock of the Company, the Initial Conversion Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any), outstanding before
such event and of which the denominator shall be the number of shares of Common
Stock outstanding after such event. In addition, the Adjustable Conversion Price
shall be calculated giving appropriate effect to the applicable event described
in (a), (b), (c) or (d) for all five Trading Days applicable to such
determination. Any adjustment made pursuant to this Section 5(c)(ii) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification.

            (iii) If the Company, at any time while any shares of Preferred
Stock are outstanding, shall issue rights or warrants to all holders of Common
Stock entitling them to subscribe for purchase shares of Common Stock at a price
per share less than the Per Share Market Value of Common Stock at the record
date mentioned below, the Initial Conversion Price shall be multiplied by a
fraction, of which the denominator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding on the date of issuance of such
rights or warrants plus the number of additional shares of Common Stock offered
for subscription or purchase, and of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding on the
date of issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such Per Share Market Value. Such adjustment shall be made whenever such
rights or warrants are issued, and shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
rights or warrants. However, upon the expiration of any right or warrant to
purchase Common Stock the issuance of which resulted in an adjustment in the
Initial Conversion Price pursuant to this Section 5(c)(iii), if any such right
or warrant shall expire and shall not have been exercised, the Initial
Conversion Price shall immediately upon such expiration be recomputed and
effective immediately upon such expiration be increased to the price which it
would have been (but reflecting any other adjustments in the Initial Conversion
Price made pursuant to the provisions of this Section 5 after the issuance of
such rights or warrants) had the adjustment of the Initial Conversion Price made
upon the issuance of such rights or warrants been made on the basis of offering
for subscription or purchase only that number of shares of Common Stock actually
purchased upon the exercise of such rights or warrants actually exercised.

            (iv) If the Company, at any time while shares of Preferred Stock are
outstanding, shall distribute to all holders of Common Stock (and not to holders
of Preferred Stock) evidences of its indebtedness (other than cash dividends) or
assets or rights or warrants to subscribe for or purchase any security
(excluding those referred to in Sections 5(c)(ii) and (iii)


                                       8
<PAGE>

above), then in each such case the Initial Conversion Price at which each share
of Preferred Stock shall thereafter be convertible shall be determined by
multiplying the Initial Conversion Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the Per Share
Market Value of Common Stock determined as of the record date mentioned above,
and of which the numerator shall be such Per Share Market Value of the Common
Stock on such record date less the then fair market value at such record date of
the portion of such assets or evidence of indebtedness so distributed applicable
to one outstanding share of Common Stock as determined by the Board of Directors
in good faith; provided, however, that in the event of a distribution exceeding
ten percent (10%) of the net assets of the Company, such fair market value shall
be determined by a nationally recognized or major regional investment banking
firm or a firm of independent certified public accountants of recognized
standing (which may be the firm that regularly examines the financial statements
of the Company) (an "Appraiser") selected in good faith by the holders of a
majority in interest of the shares of Preferred Stock then outstanding and
consented to by the Company (which consent shall not be unreasonably withheld);
and provided, further, that the Company, after receipt of the determination by
such Appraiser shall have the right to select an additional Appraiser, in good
faith, in which case the fair market value shall be equal to the average of the
determinations by each such Appraiser. In either case, the adjustments shall be
described in a statement provided to the holders of Preferred Stock of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.

            (v) All calculations under this Section 5 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.

            (vi) Whenever the Initial Conversion Price is adjusted pursuant to
Section 5(c)(ii), (iii) or (iv), the Company shall promptly mail to each holder
of Preferred Stock, a notice setting forth the Initial Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment.

            (vii) In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person pursuant to
which the Company will not be the surviving entity, the sale or transfer of all
or substantially all of the assets of the Company or any compulsory share
exchange pursuant to which the Common Stock is converted into other securities,
cash or property, the holders of the Preferred Stock then outstanding shall have
the right thereafter to, at their option, upon at least five (5) Business Days'
prior written notice, provided that the Purchaser has received a notice of such
proposed transaction at least twenty (20) days prior to the effective date or
the date of the closing, as the case may be, of the reclassification,
consolidation, merger, sale, transfer or share exchange, (A) convert such shares
only into the shares of stock and other securities, cash and property receivable
upon or deemed to be held by holders of Common Stock following such
reclassification, consolidation, merger, sale, transfer or share exchange, and
the holders of the


                                       9
<PAGE>

Preferred Stock shall be entitled upon such event to receive such amount of
securities, cash or property as the shares of Common Stock of the Company into
which such shares of Preferred Stock could have been converted immediately prior
to such reclassification, consolidation, merger, sale, transfer or share
exchange would have been entitled or (B) prior to the six-month anniversary of
the date the Underlying Shares Registration Statement has been declared
effective by the Commission, require the Company to redeem, from funds legally
available therefor at the time of such redemption, its shares of Preferred Stock
at a price per share equal to the product of (i) the average Per Share Market
Value for the five (5) Trading Days immediately preceding the effective date or
the date of the closing, as the case may be, of the reclassification,
consolidation, merger, sale, transfer or share exchange triggering such
redemption right and (ii) the Conversion Ratio calculated on the effective date
or the date of the closing of the reclassification, consolidation, merger, sale,
transfer or share exchange triggering such redemption right, as the case may be;
provided, however, that beginning on the date 151 days after the Original
Issuance Date, the maximum amount payable, in the aggregate to all holders of
Preferred Stock pursuant to the application of this provision shall be
$4,666,667; provided, further, however, that beginning on the date 181 days
after the Original Issuance Date, the maximum amount payable in the aggregate to
all holders of Preferred Stock pursuant to the application of this provisions
shall be $2,333,333. The entire redemption price shall be paid in cash, and the
terms of payment of such redemption price shall be subject to the provisions set
forth in Section 6(c). The terms of any such consolidation, merger, sale,
transfer or share exchange shall include such terms so as to give to the holder
of Preferred Stock the right to receive the securities, cash or property set
forth in this Section 5(c)(vii) as part of such consolidation, reclassification,
merger, sale, transfer or share exchange.

            (viii) If:

                  A.    the Company shall declare a dividend (or any other
                        distribution) on its Common Stock in Common Stock; or

                  B.    the Company shall declare a special nonrecurring cash
                        dividend on or a redemption of its Common Stock; or

                  C.    the Company shall authorize the granting to all holders
                        of the Common Stock rights or warrants to subscribe for
                        or purchase any shares of capital stock of any class or
                        of any rights; or

                  D.    the approval of any stockholders of the Company shall be
                        required in connection with any reclassification of the
                        Common Stock of the Company, any consolidation or merger
                        to which the Company is a party, any sale or transfer of
                        all or substantially all of the assets of the Company,
                        of any compulsory share of exchange whereby


                                       10
<PAGE>

                        the Common Stock is converted into other securities,
                        cash or property; or

                  E.    the Company shall authorize the voluntary dissolution,
                        liquidation or winding up of the affairs of the Company;

then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Preferred Stock, and shall cause to be mailed to
the holders of Preferred Stock at their last addresses as they shall appear upon
the stock books of the Company, to the extent practicable, at least 30 calendar
days prior to the applicable record or effective date hereinafter specified and
with respect to paragraph D. above, after such information has become public, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or warrants, or if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distributions, redemption, rights or warrants are
to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided, however, that
the failure to mail such notice or any defect therein on in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. Holders are entitled to convert shares of Preferred Stock during
such 30-day period commencing the date of such notice to the effective date of
the event triggering such notice.

      (d) If at any time conditions shall arise by reason of action taken by the
Company which in the opinion of the Board of Directors are not adequately
covered by the other provisions hereof and which would reasonably be expected to
materially and adversely affect the rights of the holders of Preferred Stock
(different than or distinguished from the effect generally on rights of holders
of any class of the Company's capital stock) or if at any time any such
conditions are expected to arise by reason of any action contemplated by the
Company, the Company shall mail a written notice briefly describing the action
contemplated and the material adverse effects of such action on the rights of
the holders of Preferred Stock to the extent practicable at least 30 calendar
days prior to the effective date of such action, and an Appraiser selected by
the holders of majority in interest of the Preferred Stock and consented to by
the Company (which consent shall not be unreasonably withheld) shall give its
opinion as to the adjustment, if any (not inconsistent with the standards
established in this Section 5), of the Conversion Price (including, if
necessary, any adjustment as to the securities into which shares of Preferred
Stock may thereafter be convertible) and any distribution which is or would be
required to preserve without diluting the rights of the holders of shares of
Preferred Stock; provided, however, that the Company, after receipt of the
determination by such Appraiser, shall have the right to select an additional
Appraiser, in good faith, in which case the adjustment shall be equal to the
average of the adjustments recommended by each such Appraiser. The Board of
Directors shall, consistent with their fiduciary obligations, make the
adjustment recommended


                                       11
<PAGE>

forthwith upon the receipt of such opinion or opinions or the taking of any such
action contemplated, as the case may be.

      (e) the Company covenants that it will at all times reserve and keep
available out of its authorized and unissued Common Stock solely for the purpose
of issuance upon conversion of Preferred Stock and payment of dividends on
Preferred Stock, each as herein provided, free from preemptive rights or any
other actual contingent purchase rights of persons other than the holders of
Preferred Stock, such number of shares of Common Stock as shall be issuable
(taking into account the adjustments and restrictions of Section 5(c) to the
extent known) upon the conversion of all outstanding shares of Preferred Stock
and payment of dividends hereunder. The Company shall use its best efforts to
ensure that all shares of Common Stock that shall be so issuable shall, upon
issue, be duly and validly authorized, issued and fully paid and nonassessable.

      (f) Upon a conversion hereunder, the Company shall not be required to
issue stock certificates representing fractions of shares of Common Stock, but
may if otherwise permitted, make a cash payment in respect of any final fraction
of a share based on the Per Share Market Value at such time. If the Company
elects not, or is unable, to make such a cash payment, the holder of a share of
Preferred Stock shall be entitled to receive, in lieu of the final fraction of a
share, one whole share of Common Stock.

      (g) The issuance of certificates for shares of Common Stock on conversion
of Preferred Stock shall be made without charge to the holders thereof for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided that the Company shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate upon conversion in a name other
than that of the holder of such shares of Preferred Stock so converted and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.

      (h) Shares of Preferred Stock converted into Common Stock shall be
canceled and shall have the status of authorized but unissued shares of
undesignated stock.

      (i) Any and all notices or other communications or deliveries to be
provided by the holders of the Preferred Stock hereunder, including, without
limitation, any Holder Conversion Notice, shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier
services or sent by certified or registered mail, postage prepaid, addressed to
the attention of the Chief Financial Officer of the Company at the facsimile
telephone number or address of the principal place of business of the Company as
set forth in the Purchase Agreement. Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized overnight
courier service or sent by certified or registered mail, postage prepaid,
addressed to each holder of Preferred Stock at the facsimile telephone number


                                       12
<PAGE>

or address of such holder appearing on the books of the Company, or if no such
facsimile telephone number or address appears, at the principal place of
business of the holder. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 4:30 p.m. (Eastern
Time), (ii) the date after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section later than 4:30 p.m. (Eastern Time) on any date and
earlier than 11:59 p.m. (Eastern time) on such date, (iii) four days after
deposit in the United States mail, (iv) the Business Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (v) upon
actual receipt by the party to whom such notice is required to be given.

      (j) All shares of Preferred Stock outstanding on the third anniversary of
the Original Issue Date shall automatically be converted into the right to
receive that number of shares of Common Stock which would otherwise have been
issuable to the holder thereof if such holder had delivered a Holder Conversion
Notice and such date was the Holder Conversion Date. Thereafter, all shares of
Preferred Stock shall cease to be outstanding and shall have the status of
authorized by unissued shares of undesignated stock.

      Section 7. Redemptions.

      (a) The Company shall have the right, exercisable at any time upon 30
days' notice to the holders of the Preferred Stock given at any time after the
Original Issue Date, to redeem, from funds legally available therefor at the
time of such redemption, all or any portion of the shares of Preferred Stock
which have not previously been converted or redeemed, at a price per share equal
to the product of (i) the average Per Share Market Value for the five (5)
Trading Days immediately preceding the date of the redemption notice referenced
above and (ii) the Conversion Ratio calculated on the date of such redemption
notice. The entire redemption price shall be paid in cash. Holders of Preferred
Stock may convert any shares of Preferred Stock, including shares subject to a
redemption notice given under this Section, during the period from the date of
such redemption notice through the 30th day thereafter.

      (b) If any portion of the redemption price under Section 6(a) shall not be
paid by the Company within 7 calendar days after the date due under such
Sections, such redemption price shall be increased by 10% per annum until paid
(which amount shall be paid as liquidated damages and not as a penalty). In
addition, if any portion of such redemption price remains unpaid for more than 7
calendar days after the date due, the holder of the Preferred Stock subject to
such redemption may elect, by written notice to the Company given within 45 days
after the date due, to either (i) demand conversion in accordance with the
formula and the time frame therefor set forth in Section 5 of all of the shares
of Preferred Stock for which such redemption price, plus accrued liquidated
damages thereof, has not been paid in full (the "Unpaid Redemption Shares"), in
which event the Per Share Market Price for such shares shall be the lower of the
Per Share Market Price calculated on the date such redemption price was
originally due and the Per Share Market Price as of the holder's written demand
for conversion,


                                       13
<PAGE>

or (ii) invalidate ab initio such redemption, notwithstanding anything herein
contained to the contrary. If the holder elects option (i) above, the Company
shall within five (5) Trading Days of its receipt of such election deliver to
the holder the shares of Common Stock issuable upon conversion of the Unpaid
Redemption Shares subject to such holder conversion demand and otherwise perform
its obligations hereunder with respect thereto; or, if the Holder elects option
(ii) above, the Company shall promptly, and in any event not later than five (5)
Trading Days from receipt of holder's notice of such election, return to the
holder all of the Unpaid Redemption Shares.

      Section 8. Definitions. For the purposes hereof, the following terms shall
have the following meanings:

      "Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government action to close.

      "Common Stock" means the Company's common stock, $.01 par value per share
of the Company and stock of any other class into which such shares may hereafter
have been reclassified or changed.

      "Conversion Ratio" means, at any time, a fraction, of which the numerator
is Stated Value plus accrued but unpaid dividends (including any accrued but
unpaid interest thereon), and of which the denominator is the Conversion Price
at such time.

      "Junior Securities" means the Common Stock and all other equity securities
of the Company which are junior in rights and liquidation preferences to the
Preferred Stock.

      "Original Issue Date" shall mean the date of the first issuance of any
applicable share of Preferred Stock regardless of the number of transfers of any
particular share of Preferred Stock and regardless of the number of certificates
which may be issued to evidence such Preferred Stock.

      "Per Share Market Value" means on any particular date (a) the closing bid
price per share of the Common Stock on such date on the Nasdaq SmallCap Market
or other principal national stock exchange or market on which the Common Stock
is then listed or if there is no such price on such date, then the closing bid
price on such exchange or market on the date nearest preceding such date, or (b)
if the Common Stock is not listed then on the Nasdaq SmallCap Market or any
stock exchange or market, the closing bid price for a share of Common Stock in
the over-the-counter market, as reported by the Nasdaq Stock Market at the close
of business on such date, or (c) if the Common Stock is not quoted on the Nasdaq
Stock Market, the closing bid price for a share of Common Stock in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions of
reporting prices), or (d) if the Common Stock is not then reported by the
National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its


                                       14
<PAGE>

functions of reporting prices), then the average of the "Pink Sheet" quotes for
the relevant conversion period, as reasonably determined in good faith by the
holder, or (e) if the Common Stock is not then publicly traded the fair market
value of a share of Common Stock as determined by an Appraiser selected in good
faith by the holders of a majority in interest of the shares of the Preferred
Stock and consented to by the Company (which consent shall not be unreasonably
withheld); provided, however, that the Company, after receipt of the
determination by such Appraiser, shall have the right to select an additional
Appraiser, in which case, the fair market value shall be equal to the average of
the determinations by each such Appraiser.

      "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

      "Purchase Agreement" means the Convertible Preferred Stock Purchase
Agreement, dated as of January 31, 1997, between the Company and the original
purchasers of the Preferred Stock.

      "Registration Rights Agreement" means the Registration Rights Agreement,
dated the Original Issue Date, by and between the Company and the original
purchasers of Preferred Stock.

      "Trading Day" means (a) a day on which the Common Stock is traded on the
Nasdaq SmallCap Market or other principal national securities exchanges or
market on which the Common Stock has been listed, or (b) if the Common Stock is
not listed on the Nasdaq SmallCap Market or any such stock exchange or market, a
day on which the Common Stock is traded in the over-the-counter market, as
reported by the OTC Bulletin Board, or (c) if the Common Stock is not quoted on
the OTC Bulletin Board, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of
reporting prices).

      "Underlying Shares" means the shares of Common Stock issuable upon
conversion of Shares in accordance with the terms hereof and the Purchase
Agreement.

      RESOLVED, FURTHER, that the President and Secretary of the Company be, and
they hereby are, authorized and directed to prepare, execute, verify, and file
with the Secretary of State of Delaware, a Certificate of Designation in
accordance with these resolutions and as required by law.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                             SIGNATURE PAGE FOLLOWS]


                                       15
<PAGE>

      IN WITNESS WHEREOF, The National Registry Inc. has caused its corporate
seal to be hereunto affixed and this certificate to be signed by John Gustafson,
its President, and attested by David Brogan, its Secretary, this 5th day of
February.

                                          THE NATIONAL REGISTRY INC.


                                          By:              /s/
                                             -----------------------------------
                                             Name: John Gustafson
                                             Title: President

Attest:


By:               /s/
   ----------------------------------
   Name:  David Brogan
   Title:  Secretary


                                       16
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION
                            AT THE ELECTION OF HOLDER

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

The undersigned hereby irrevocably elects to convert the number of shares of
Series C Convertible Preferred Stock indicated below, into shares of Common
Stock, $.01 par value per share (the "Common Stock"), of The National Registry
Inc. (the "Company") according to the conditions set forth in the applicable
Certificate of Designation, as of the date written below. If shares are to be
issued in the name of a person other than undersigned, the undersigned will pay
all transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the Company in accordance
therewith. No fee will be charged to the holder for any conversion, except for
such transfer taxes, if any.

Conversion calculations:
                             ---------------------------------------------------
                             Date to Effect Conversion

                             ---------------------------------------------------
                             Number of shares of Preferred Stock to be Converted

                             ---------------------------------------------------
                             Number of shares of Common Stock to be Converted

                             ---------------------------------------------------
                             Applicable Conversion Price

                             ---------------------------------------------------
                             Number of shares of Common Stock beneficially owned
                             by the undersigned as of the date of this notice

                             ---------------------------------------------------
                             Signature

                             ---------------------------------------------------
                             Name:

                             ---------------------------------------------------
                             Address:

The Company undertakes to promptly upon its receipt of this conversion notice
(and, in any case prior to the time it effects the conversion requested hereby),
notify the converting holder by facsimile of the number of shares of Common
Stock outstanding on such date and the number of shares of Common Stock which
would be issuable to the holder if the conversion requested in this conversion
notice were effected in full, whereupon, if the Company determines that such
conversion would result in it owning in excess of 4.9% of the outstanding shares
of Common Stock and issue to the holder one or more certificates representing
shares of Preferred Stock which have not been converted as a result of this
provision.