Exhibit 10.37
                               LECROY CORPORATION

                   AMENDMENT TO THE CERTIFICATE OF DESIGNATION
                                     OF THE
                 SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK

         The undersigned officer of LeCroy Corporation (the "Corporation"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware, hereby certifies that:

         FIRST: Pursuant to the authority conferred by the Certificate of
Incorporation of the Corporation and pursuant to the provisions of Section 151
of the General Corporation Law, the Board of Directors of the Corporation, by
unanimous written consent dated as of April 9, 2001, adopted the following
resolution setting forth a proposed amendment to the Certificate of Designation
of the Series A Convertible Redeemable Preferred Stock of the Corporation (the
"Certificate of Designation"), declaring the amendment to be advisable and
directing the holders of the Series A Convertible Redeemable Preferred Stock of
the Corporation to consider the proposed amendment and indicate their
authorization of it by consent in writing:

RESOLVED:                  That it is desirable and in the best interest of the
                           Corporation to amend the terms, powers, preferences
                           and relative, participating, optional or other
                           special rights of, and the qualifications,
                           limitations or restrictions of, the Corporation's
                           Series A Convertible Redeemable Preferred Stock as
                           set forth in the Amendment to the Certificate of
                           Designation attached hereto as Exhibit A.

FURTHER
RESOLVED:                  That, subject to obtaining the requisite stockholder
                           approval, the Certificate of Designation be amended
                           to read in its entirety as set forth in Exhibit A
                           attached hereto.

         SECOND: That, thereafter, holders of at least two-thirds of the
outstanding shares of Series A Convertible Redeemable Preferred Stock of the
Corporation duly adopted, by written consent in accordance with Section 228 of
the General Corporation Law of the State of Delaware, the proposed amendment to
the Certificate of Designation.

         THIRD: That the amendment to the Certificate of Designation was duly
adopted in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.

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                                      -2-

         IN WITNESS WHEREOF, the Corporation has caused this Amendment to the
Certificate of Designation to be duly executed in its corporate name by a duly
authorized officer as of this 9th day of April, 2001.

                                      LECROY CORPORATION

                                      By: /s/ Lutz P. Henckels
                                          ---------------------------
                                          Lutz P. Henckels
                                          President and Chief Executive Officer

Attest:

/s/ Raymond F. Kunzmann
----------------------------------
Raymond F. Kunzmann
Vice President - Finance, Chief Financial Officer,
Treasurer and Secretary

<PAGE>
                                    EXHIBIT A

DESCRIPTION AND DESIGNATION OF THE SERIES A CONVERTIBLE REDEEMABLE PREFERRED
STOCK

           1. Designation. 500,000 shares of Preferred Stock, par value $.01 per
share, shall be designated the "Series A Convertible Redeemable Preferred Stock"
(being referred to herein as the "Series A Preferred Stock" ). The shares of
Series A Preferred Stock shall have the following rights, terms and privileges:

           2. Dividends.
              (a) Except as otherwise set forth in paragraph (b) below, no
dividends shall be paid upon shares of Series A Preferred Stock.

              (b) In the event of either (i) a liquidation event as described in
Section 3 hereof or (ii) the redemption by holders of shares of the Series A
Preferred Stock, pursuant to Section 7 hereof, prior to any payment or
distribution to the holders of common stock, par value of $.01, of the
Corporation ("Common Stock") or any other equity security of the Corporation,
the holders of shares of Series A Preferred Stock shall be entitled to receive,
out of funds legally available therefor, cumulative dividends compounded
annually at a rate per share equal to twelve percent (12%) of the original
purchase price of $20.00 paid per share of the Series A Preferred Stock (which
amount shall be subject to adjustment whenever there shall occur a stock split,
combination, reclassification or other similar event involving the Series A
Preferred Stock). Such dividends shall be deemed to accrue on the Series A
Preferred Stock from the date of the original issuance thereof and be
cumulative, whether or not earned or declared and whether or not there are
profits, surplus or other funds of the Corporation legally available for the
payment of dividends. If such cumulative dividends in respect of any prior or
current annual dividend period shall not have been declared and paid or if there
shall not have been a sum sufficient for the payment thereof set apart, the
deficiency shall first be fully paid before any dividend or other distribution
shall be paid or declared and set apart with respect to any class of the
Corporation's capital stock, now or hereafter outstanding.

              (c) Dividends in Kind. In the event the Corporation shall make or
issue, or shall fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution with respect to the
Common Stock payable in (i) securities of the Corporation other than shares of
Common Stock or (ii) assets, then and in each such event the holders of Series A
Preferred Stock shall receive, at the same time such distribution is made with
respect to Common Stock, the number of securities or such other assets of the
Corporation which they would have received had their Series A Preferred Stock
been converted into Common Stock immediately prior to the record date for
determining holders of Common Stock entitled to receive such distribution.

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                                      -2-

         3. Liquidation, Dissolution or Winding Up.

              (a) Treatment at Liquidation, Dissolution or Winding Up. In the
event of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, before any distribution may be made with respect to
the Common Stock, each holder of outstanding shares of Series A Preferred Stock
shall be entitled to, at such holder's sole discretion, elect to either (a)
convert such holder's Series A Preferred Stock into shares of Common Stock
pursuant to Section 5 hereof, or (b) be paid, prior to any payments to any other
holders of outstanding shares of Preferred Stock, out of the assets of the
Corporation available for distribution to holders of the Corporation's capital
stock of all classes, whether such assets are capital, surplus, or capital
earnings, an amount equal to (i) $20.00 per share (which amount shall be subject
to equitable adjustment whenever there shall occur a stock split, combination,
reclassification or other similar event involving the Series A Preferred Stock)
plus (ii) all accrued and unpaid 12% cumulative dividends compounded annually
thereon, whether or not earned or declared, since the date of issue up to and
including the date full payment shall be tendered to the holders of the Series A
Preferred Stock with respect to such liquidation, dissolution or winding up
(collectively, the "Series A Liquidation Amount," and together with all other
amounts to be paid in respect of shares of Preferred Stock in preference to
shares of Common Stock in the event of such liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the "Liquidation
Amount"). Notice of such election shall be submitted in writing to the
Corporation at its principal offices no later than five (5) business days prior
to the effective date of such liquidation, dissolution or winding up of the
Corporation. Failure to deliver such notice by such date shall be deemed to be
an election to have such holder's Series A Preferred Stock converted into shares
of Common Stock of the Corporation pursuant to Section 5 hereof. If the assets
of the Corporation available for distribution to its stockholders shall be
insufficient to pay the holders of shares of Series A Preferred Stock the full
amount of the Series A Liquidation Amount to which they shall be entitled, the
holders of shares of Series A Preferred Stock shall share ratably in any
distribution of assets according to the amounts which would be payable with
respect to the Series A Preferred Stock held by them upon such distribution if
all amounts payable on or with respect to said shares were paid in full.

         After the payment of the Liquidation Amount shall have been made in
full to the holders of the Preferred Stock (including the payment of the Series
A Liquidation Amount) or funds necessary for such payment shall have been set
aside by the Corporation in trust for the account of the holders of Preferred
Stock so as to be available for such payments, the remaining assets of the
Corporation legally available for distribution to its stockholders shall be
distributed among the holders of Common Stock and Series A Preferred Stock,
collectively as one class. Such distribution shall be made to the holders of
Common Stock and Series A Preferred Stock ratably as if each share of the Series
A Preferred Stock had been converted into the number of shares of Common Stock
issuable upon the conversion of a share of Series A Preferred Stock immediately
prior to such liquidation, dissolution or winding up of the Corporation.

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                                      -3-

              (b) Treatment of Reorganizations. Any Reorganization (as such term
is defined in Section 5(g)), shall be regarded as a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 3.

              (c) Distributions in Cash. The Series A Liquidation Amount shall
in all events be paid in cash; provided, however, that if the Series A
Liquidation Amount is payable in connection with a Reorganization, then each
holder of Series A Preferred Stock may, at its election in writing to the
Corporation at its principal offices no later than five (5) business days before
the effective date of such event, receive payment of the Series A Liquidation
Amount in the same form of consideration as is payable with respect to the
Common Stock; and provided further that, notwithstanding the foregoing or any
other provision herein to the contrary, if the Series A Liquidation Amount is
payable in connection with a Reorganization, the payment of all accrued and
unpaid 12% cumulative dividends compounded annually shall be subject to, and
payable in the manner provided in, Section 5(a) hereof. In the event of any
Reorganization which is intended to be treated as a "pooling of interests" for
accounting purposes under Accounting Board Opinion No. 16, the Reorganization or
other acquisition consideration (including any shares of capital stock to be
delivered by the acquiring corporation) shall be reallocated among the holders
of the Series A Preferred Stock in an appropriate manner to give economic effect
to the intent and purpose of Sections 3(a), 3(b) and 3(c). Wherever a
distribution provided for in this Section 3 is payable in property other than
cash, the value of such distribution shall be the fair market value of such
property as determined in good faith by the Corporation's Board of Directors.

           4. Voting Power. In addition to the special voting right expressly
provided in Section 8 hereof, or as required by law, each holder of Series A
Preferred Stock shall be entitled to vote on all matters and shall be entitled
to that number of votes equal to the largest number of whole shares of Common
Stock into which such holder's shares of Series A Preferred Stock could be
converted, pursuant to the provisions of Section 5 hereof, at the record date
for the determination of stockholders entitled to vote on such matter or, if no
such record date is established, at the date such vote is taken or any written
consent of stockholders is solicited. Except as otherwise expressly provided in
Section 8 hereof or as required by law, the holders of shares of Series A
Preferred Stock and shares of Common Stock shall vote together as a single class
on all matters.

         5. Conversion Rights for the Preferred Stock. The holders of Series A
Preferred Stock shall have the following rights with respect to the conversion
of Series A Preferred Stock into shares of Common Stock:

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                                      -4-

              (a) General. Subject to and in compliance with the provisions of
this Section 5, any share of Series A Preferred Stock may, at the option of the
holder, be converted at any time into fully paid and non-assessable shares of
Common Stock. The number of shares of Common Stock to which a holder of Series A
Preferred Stock shall be entitled upon conversion shall be determined by
multiplying the Conversion Rate (determined as provided in Section 5(b)) by the
number of shares of Series A Preferred Stock being converted. Upon any
conversion pursuant to the provisions of Sections 3(a), 5(g) or 5(n), the
Corporation shall, in addition to the issuance of shares of Common Stock, pay in
cash to the holder all accrued and unpaid 12% cumulative dividends compounded
annually on such shares of Series A Preferred Stock being converted, provided,
however, that such dividend payments shall be payable only to the extent that
(i) upon any conversion pursuant to Section 5(g) or Section 5(n), the
Corporation is successful in raising cash proceeds in an offering of permanent
equity in an amount sufficient to pay such dividends or (ii) upon any conversion
pursuant to Section 5(g) as a result of a Reorganization (as defined in Section
5(g)), such Reorganization provides for either (a) the payment of cash or stock
consideration to the Corporation and/or its stockholders by the acquirer in an
amount that is sufficient to pay such dividends or (b) the assumption by the
acquirer of all obligations to pay such dividends. In the event that, in the
case of any conversion pursuant to Section 5(g), such Reorganization does not
provide for such payment or assumption of dividends, or, in the case of any
conversion pursuant to Section 5(n), the Corporation is unsuccessful in raising
cash proceeds in an offering of permanent equity in an amount sufficient to pay
such dividends (as the case may be), each holder of Series A Preferred Stock
shall have the right to convert all of the holder's accrued and unpaid 12%
cumulative dividends compounded annually into shares of Common Stock registrable
under the Securities Act of 1933, as amended, at the fair market value of the
Common Stock immediately prior to the effectiveness of the Reorganization or
conversion pursuant to Section 5(n), as the case may be.

         With respect to the foregoing, the Corporation shall (i) upon any
conversion pursuant to Section 5(g) or 5(n), use commercially reasonable efforts
to raise cash proceeds in a permanent equity offering in an amount necessary to
pay such dividends within one hundred and fifty (150) days of the occurrence of
the event that provides each holder with the right to receive dividend payments
pursuant to Section 3(a) and Section 5 and/or (ii), upon any conversion pursuant
to Section 5(g) as a result of a Reorganization, use commercially reasonable
efforts to structure such Reorganization in a way that provides for the payment
of cash or stock consideration to the Corporation and/or its stockholders by the
acquirer in an amount that is sufficient to pay such dividends or for the
assumption by the acquirer of all obligations to pay such dividends.

              (b) Conversion Rate. The conversion rate in effect at any time for
the conversion of Series A Preferred Stock (the "Conversion Rate") shall be
determined by dividing $20.00 by the Conversion Value, calculated as provided in
Section 5(c).

              (c) Conversion Value. The conversion value (the "Conversion
Value") shall initially be $20.00. Such Conversion Value shall be subject to
adjustment from time to time in accordance with this Section 5.

              (d) Series A Extraordinary Common Stock Event. Upon the happening
of a Series A Extraordinary Common Stock Event (as hereinafter defined), the
Conversion Value shall, simultaneously with the happening of such Series A
Extraordinary Common Stock Event, be adjusted by multiplying the then effective
Conversion Value by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such Series A
Extraordinary Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such Series A
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the applicable Conversion Value. The Conversion Value shall be readjusted in
the same manner upon the happening of any successive Series A Extraordinary
Common Stock Event or Events.

<PAGE>
                                      -5-

              "Series A Extraordinary Common Stock Event" shall mean (i) the
              issue of additional shares of Common Stock as a dividend or other
              distribution on outstanding Common Stock or on any class or series
              of preferred stock, unless made pro rata to holders of Preferred
              Stock, (ii) a subdivision of outstanding shares of Common Stock
              into a greater number of shares of Common Stock, or (iii) a
              combination of outstanding shares of the Common Stock into a
              smaller number of shares of Common Stock.

              (e) Dividends. In the event the Corporation shall make or issue, a
dividend or other distribution with respect to the Common Stock payable in (i)
securities of the Corporation other than shares of Common Stock or (ii) assets,
then and in each such event the holders of Series A Preferred Stock shall
receive, at the same time such distribution is made with respect to Common
Stock, the number of securities or such other assets of the Corporation which
they would have received had their Series A Preferred Stock been converted into
Common Stock immediately prior to the date of such distribution. No adjustment
to the Conversion Value shall occur as a result of any such dividend.

              (f) Capital Reorganization or Reclassification. If the Common
Stock issuable upon the conversion of the Series A Preferred Stock shall be
changed into the same or different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other
than a subdivision or combination of shares or stock dividend or distribution
provided for elsewhere in this Section 5 or by a Reorganization), then and in
each such event, the holder of each share of Series A Preferred Stock shall have
the right thereafter to convert such share into the kind and amount of shares of
stock and other securities and property receivable upon such capital
reorganization, reclassification or other change by holders of the number of
shares of Common Stock into which such shares of Series A Preferred Stock might
have been converted immediately prior to such capital reorganization,
reclassification or other change.

<PAGE>
                                      -6-

              (g) Merger or Sale of Assets. If at any time or from time to time
there shall be a merger or consolidation of the Corporation with or into another
corporation which results in the exchange of outstanding shares of the capital
stock of the Corporation for securities or other consideration issued or paid by
such other corporation, or the sale of all or substantially all of the
Corporation's properties and assets to any other person, or the sale of voting
securities of the Corporation in one transaction or a series of related
transactions entitling the holders thereof to elect a majority of the Board of
Directors of the Corporation (any of which events is herein referred to as a
"Reorganization"), then as a part of such Reorganization, provision shall be
made so that the holders of Series A Preferred Stock shall thereafter be
entitled to receive upon conversion of the Series A Preferred Stock, the number
of shares of stock or other securities or property of the Corporation, or of the
successor corporation resulting from such Reorganization, to which such holder
would have been entitled if such holder had converted its shares of Series A
Preferred Stock immediately prior to such Reorganization. Notwithstanding the
foregoing, a Reorganization shall not include any reorganization, merger or
consolidation involving (1) only a change in the state of incorporation of the
Corporation, (2) a merger of the Corporation with or into a wholly-owned
subsidiary of the Corporation that is incorporated in the United States of
America or (3) an acquisition by merger, reorganization or consolidation, of
which the Corporation is the surviving corporation and operates as a going
concern, of another corporation that is engaged in a business similar or related
to or complementary with the business of the Corporation and which does not
involve a recapitalization or reorganization of the Series A Preferred Stock or
Common Stock, and does not involve (in a single transaction or series of related
transactions) a transfer of more than 51% of the voting power of the
Corporation. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 5 with respect to the rights of
the holders of Series A Preferred Stock after the Reorganization, to the end
that the provisions of this Section 5 (including adjustment of the Conversion
Value then in effect and the number of shares issuable upon conversion of the
Series A Preferred Stock) shall be applicable after that event in as nearly
equivalent a manner as may be practicable.

         Upon the occurrence of a Reorganization, under circumstances which make
the preceding paragraph applicable, each holder of Series A Preferred Stock
shall have the option of electing treatment for his shares of Series A Preferred
Stock under either this Section 5(g) or Section 3 hereof, notice of which
election shall be submitted in writing to the Corporation at its principal
offices no later than five (5) business days before the effective date of such
event. Failure to deliver such notice by such date shall be deemed to be an
election to have such shares treated under this Section 5(g).

              (h) Certificate as to Adjustments; Notice by Corporation. In each
case of an adjustment or readjustment of the Conversion Rate, the Corporation at
its expense will furnish each holder of Series A Preferred Stock with a
certificate, executed by the president and chief financial officer (or in the
absence of a person designated as the chief financial officer, by the treasurer)
showing such adjustment or readjustment, and stating in detail the facts upon
which such adjustment or readjustment is based. Any adjustment shall be
calculated to five (5) decimal places.

<PAGE>
                                       -7-

              (i) Exercise of Conversion Privilege. To exercise its conversion
privilege, a holder of Series A Preferred Stock shall surrender the certificate
or certificates representing the shares being converted to the Corporation at
its principal office, and shall give written notice to the Corporation at that
office that such holder elects to convert such shares. Such notice shall also
state the name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock issuable upon such conversion shall be
issued. The certificate or certificates for shares of Series A Preferred Stock
surrendered for conversion shall be accompanied by proper assignment thereof to
the Corporation or in blank. The date when such written notice is received by
the Corporation, together with the certificate or certificates representing the
shares of Series A Preferred Stock being converted, shall be the "Conversion
Date." As promptly as practicable after the Conversion Date, the Corporation
shall issue and shall deliver to the holder of the shares of Series A Preferred
Stock being converted, or on its written order, such certificate or certificates
as it may request for the number of whole shares of Common Stock issuable upon
the conversion of such shares of Series A Preferred Stock in accordance with the
provisions of this Section 5 and cash, as provided in Section 5(j), in respect
of any fraction of a share of Common Stock issuable upon such conversion. Such
conversion shall be deemed to have been effected immediately prior to the close
of business on the Conversion Date, and at such time the rights of the holder as
holder of the converted shares of Series A Preferred Stock shall cease and the
person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares of Common Stock
represented thereby. The Corporation shall pay any taxes payable with respect to
the issuance of Common Stock upon conversion of the Series A Preferred Stock,
other than any taxes payable with respect to income by the holders thereof;
provided, however, that the Corporation shall not be required to pay any taxes
or other governmental charges which may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate in a name other
than that of the holder of the Series A Preferred Stock, and the Corporation
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
Corporation the amount of such tax or other governmental charge or shall have
established to the satisfaction of the Corporation that such tax or other
governmental charge has been paid or provided for. The Corporation may also
require, as a condition to the issuance and delivery of any such certificate in
a name other than that of the Holder of any such certificate, an opinion of
counsel acceptable to the Corporation to the effect that the proposed transfer
does not require registration under federal or any state securities law.

              (j) Cash in Lieu of Fractional Shares. No scrip or fractional
shares may be issued by the Corporation. Instead, the Corporation shall pay to
the holder of the shares of Series A Preferred Stock which were converted a cash
adjustment in respect of such fractional shares in an amount equal to the same
fraction of the market price per share of the Common Stock (as determined in a
reasonable manner prescribed by the Board of Directors) at the close of business
on the Conversion Date. The determination as to whether or not any factional
shares are issuable shall be based upon the total number of shares of Series A
Preferred Stock being converted at any one time by any holder thereof, not upon
each share of Series A Preferred Stock being converted.

              (k) Partial Conversion. In the event some but not all of the
shares of Series A Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Corporation shall execute and deliver
to or on the order of the holder, at the expense of the Corporation, a new
certificate representing the number of shares of Series A Preferred Stock which
were not converted.

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                                      -8-

              (l) Reservation of Common Stock. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the shares
of Series A Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of Series A Preferred Stock, and if at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of Series A Preferred Stock, the
Corporation shall take such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose.

              (m) Minimum Adjustment. Any provision of this Section 5 to the
contrary notwithstanding, no adjustment in the Conversion Value shall be made if
the amount of such adjustment would be less than 1% of the Conversion Value then
in effect, but any such amount shall be carried forward and an adjustment with
respect thereto shall be made at the time of and together with any subsequent
adjustment which, together with all amounts so carried forward, aggregates 1% or
more of the Conversion Value then in effect.

              (n) Automatic Conversion. If at any time the Corporation shall
effect a Qualified Public Offering (as hereinafter defined), then upon the
effectiveness of the Registration Statement relating to such Qualified Public
Offering, all outstanding shares of Series A Preferred Stock shall automatically
convert into shares of Common Stock on the basis set forth in Section 5 hereof,
including the payment in cash of all accrued and unpaid 12% cumulative dividends
compounded annually on such shares of Series A Preferred Stock being so
converted. For purposes hereof, the term "Qualified Public Offering" shall mean
the effectiveness of a firmly underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Act"), covering the offer and sale of Common Stock for the account of the
Corporation with an Underwriter in which the aggregate gross proceeds to the
Corporation equal at least $20,000,000 and in which the price per share of
Common Stock is equal to or greater than (i) $28.00 per share if the Qualified
Public Offering is consummated on or before June 30, 2000; (ii) $36.00 per share
if the Qualified Public Offering is consummated between the period of July 1,
2000 and June 30, 2001; and (iii) $40.00 per share if the Qualified Public
Offering is consummated after June 30, 2001, which amounts shall be subject to
equitable adjustment whenever there shall occur a stock split, combination,
reclassification or other similar event involving the Common Stock. Holders of
shares subject to conversion shall deliver to the Corporation at its principal
office (or such other office or agency as the Corporation may designate by
notice in writing) during its usual business hours, the certificate or
certificates for shares of Series A Preferred Stock being converted, and the
Corporation shall issue and deliver to such holders certificates for the number
of shares of Common Stock to which such holders are entitled. Until such time as
holders of shares of Series A Preferred Stock shall surrender those certificates
therefor as provided above, such certificates shall be deemed to represent the
shares of Common Stock to which the holders shall be entitled upon the surrender
thereof.

<PAGE>
                                      -9-

         The automatic conversion of the Series A Preferred Stock into shares of
Common Stock as provided above shall be subject in all circumstances to the
closing and consummation of a Qualified Public Offering.

         6. No Reissuance of Preferred Stock. No share or shares of Series A
Preferred Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be canceled
and retired and restored to the status of undesignated Preferred Stock. The
Corporation may from time to time take such appropriate corporate action as may
be necessary to reduce the authorized number of shares of Series A Preferred
Stock accordingly.

         7. Redemption. The shares of Series A Preferred Stock shall be
redeemable as follows:

              (a) Optional Redemption by Holders. At the request in writing of
any holder of Series A Preferred Stock (a "Requesting Holder"), in its sole
discretion, made on or after June 30, 2004 (the "Redemption Election Period"),
unless such date is extended as provided below, the Corporation shall, to the
extent it may do so under applicable law, redeem all or any portion of the
shares of Series A Preferred Stock held by the Requesting Holder and all other
holders of Series A Preferred Stock who elect in writing to have their shares
redeemed. Each redemption request shall be irrevocable once made. The redemption
shall occur, and the redemption payment shall be due, one hundred and fifty
(150) days from the date of the Requesting Holder's notice to the Corporation
(the "Notice Date"). The Corporation is required within five (5) business days
of the Notice Date to mail appropriate written notice, postage prepaid, to each
holder of record of Series A Preferred Stock at its address shown on the records
of the Corporation on the Notice Date, providing each such holder with notice
that such holder may make an election to redeem shares of Series A Preferred
Stock at any time within thirty (30) days of the Notice Date. In the event that
the shares of Series A Preferred Stock may not be redeemed because of a
prohibition under applicable law, such shares shall be redeemed as soon as such
prohibition no longer exists. The redemption price for each share of Series A
Preferred Stock redeemed pursuant to this Section 7(a) (the "Redemption Price")
shall be equal to the Series A Liquidation Amount (including all accrued and
unpaid 12% cumulative dividends compounded annually, whether or not declared)
with the amount of all accrued dividends due thereon to be calculated and paid
through the date payment is actually made to the holders of Series A Preferred
Stock, provided however, that cash payment shall be made to the holders of
Series A Preferred Stock by the Corporation with respect to all accrued and
unpaid 12% cumulative dividends only to the extent that the Corporation is
successful in raising cash proceeds in an offering of its permanent equity that
are sufficient to pay such dividends.

<PAGE>
                                      -10-

         With respect to the foregoing, the Corporation shall use commercially
reasonable efforts to raise cash proceeds in a permanent equity offering in an
amount necessary to pay such dividends. To the extent that the Corporation is
unsuccessful in raising sufficient proceeds within one hundred and fifty (150)
days of the Notice Date, the dividend rate payable with respect to each share of
Series A Preferred Stock held as of the Notice Date to the holders of such stock
shall increase from 12% per annum to 15% per annum from the date of the original
issuance of such Series A Preferred Stock.

         In the event that the holders of Series A Preferred Stock do not elect
to have any portion of the Series A Preferred Stock redeemed pursuant to this
Section 7(a), such shares of Series A Preferred Stock shall remain outstanding
and subject to the provisions hereof.

              (b) Redemption Notice. If an election is made pursuant to Section
7(a) hereof, written notice of such election shall be mailed, postage prepaid,
to the Corporation, not later than sixty (60) days before the date fixed for
such redemption pursuant to Section 7(a) (each date fixed for redemption and the
extended redemption date is hereinafter referred to as a "Redemption Date"). If
such election is made and appropriate notice is given then, at least fifteen
(15) days before the Redemption Date, written notice (hereinafter referred to as
the "Redemption Notice") shall be mailed by the Corporation, postage prepaid, to
each holder of record of Series A Preferred Stock at its address shown on the
records of the Corporation; provided, however, that the Corporation's failure to
give such Redemption Notice shall in no way affect its obligation to redeem the
shares of Series A Preferred Stock or the obligation of the holders to redeem
their shares of Series A Preferred Stock as provided in Section 7(a) hereof. The
Redemption Notice shall contain the following information:

                   (i) the number of shares of Series A Preferred Stock held by
the holder, the number of shares of Series A Preferred Stock held by the holder
subject to redemption as of such Redemption Date and the total number of shares
of Series A Preferred Stock held by all holders subject to redemption as of such
Redemption Date; and

                   (ii) the Redemption Date and the applicable Redemption Price.

              (c) Surrender of Certificates. Each holder of shares of Series A
Preferred Stock to be redeemed under this Section 7 shall surrender the
certificate or certificates representing such shares to the Corporation at the
place designated in the Redemption Notice, and thereupon the Redemption Price
for such shares as set forth in this Section 7 shall be paid to the order of the
person whose name appears on such certificate or certificates. Irrespective of
whether the certificates therefor shall have been surrendered, all shares of
Series A Preferred Stock which are the subject of a Redemption Notice shall be
deemed to have been redeemed and shall be canceled effective as of the
Redemption Date, unless the Corporation shall default in the payment of the
applicable Redemption Price.

              (d) Redeemed Shares Retired. Any shares of Series A Preferred
Stock redeemed pursuant to this Section 7 shall be canceled and shall not be
reissued under any circumstances; and the Corporation may from time to time take
such appropriate corporate action as may be necessary to reduce accordingly the
number of authorized shares of Series A Preferred Stock.

<PAGE>
                                      -11-

         8. Restrictions and Limitations.

              (a) Corporate Action. Except as expressly provided herein or as
required by law, so long as at least a majority of shares of Series A Preferred
Stock remain outstanding, the Corporation shall not, and shall not permit any
subsidiary (which shall mean any corporation, association or other business
entity which the Corporation and/or any of its other subsidiaries directly or
indirectly owns at the time more than fifty percent (50%) of the outstanding
voting shares of such corporation or trust to), without the approval by vote or
written consent by the holders of at least a majority of the then outstanding
shares of Series A Preferred Stock, voting as a separate class:

              (i) redeem, purchase or otherwise acquire for value (or pay into
or set aside for a sinking fund for such purpose), or declare and pay or set
aside funds for the payment of any dividend with respect to, any share or shares
of capital stock other than shares of Series A Preferred Stock in accordance
with their terms, except as required or permitted hereunder and except for the
purchase of shares of Common Stock from former directors, officers, employees or
consultants of the Corporation who acquired such shares directly from the
Corporation, if each such purchase is made pursuant to contractual rights held
by the Corporation relating to the termination of employment or engagement of
such former director, officer, employee or consultant, as the case may be, and
the purchase price does not exceed the fair market value of such shares as
determined by the Board of Directors of the Corporation;

              (ii) authorize or issue, or obligate itself to authorize or issue,
additional shares of Series A Preferred Stock;

              (iii) authorize or issue, or obligate itself to authorize or
issue, any equity security senior to or on parity with the Series A Preferred
Stock as to liquidation preferences, redemption rights, dividend rights or
voting rights; or

              (iv) amend, restate, modify or alter the by-laws of the
Corporation in any way which adversely affects the rights of the holders of
Series A Preferred Stock.

              (b) Amendments to Charter. The Corporation shall not amend its
Certificate of Incorporation without the approval, by vote or written consent,
by the holders of at least two-thirds of the then outstanding shares of Series A
Preferred Stock, voting separately as a class, if such amendment would amend any
of the rights, preferences, privileges of or limitations provided for in this
Section 8 for the benefit of, or amend any other provision of this Section 8
that would materially effect the value of, any shares of Series A Preferred
Stock. Without limiting the generality of the preceding sentence, the
Corporation will not amend its Certificate of Incorporation without the approval
by the holder of at least two-thirds of the then outstanding shares of Series A
Preferred Stock, if such amendment would:

<PAGE>
                                      -12-

              (i) change the relative seniority rights of the holders of Series
A Preferred Stock as to the payment of dividends in relation to the holders of
any other capital stock of the Corporation;

              (ii) reduce the amount payable to the holders of Series A
Preferred Stock upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, or change the dividend rights of the holders of
Series A Preferred Stock;

              (iii) cancel or modify the conversion rights of the holders of
Series A Preferred Stock provided for in Section 5 herein; or

              (iv) cancel or modify the rights of the holders of Series A
Preferred Stock provided for in this Section 8.

         9. No Dilution or Impairment. The Corporation (a) will not increase the
par value of any shares of stock receivable on the conversion of the Series A
Preferred Stock above the amount payable therefor on such conversion, (b) will
take all such action as may be necessary or appropriate in order that the
Corporation may validly and legally issue fully paid and non-assessable shares
of stock on the conversion of all shares of Series A Preferred Stock from time
to time outstanding, or (c) will not consolidate with or merge into any other
person or permit any such person to consolidate with or merge into the
Corporation (if the Corporation is not the surviving person), unless such other
person shall expressly assume in writing and will be bound by all of the terms
of the Series A Preferred Stock set forth herein.

         10. Notices of Record Date. In the event of:

              (a) any taking by the Corporation of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or

              (b) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger of the Corporation, or any transfer of all or substantially all of
the assets of the Corporation to any other corporation, or any other entity or
person, or

              (c) any voluntary or involuntary dissolution, liquidation or
winding up of the Corporation,

then and in each such event the Corporation shall mail or cause to be mailed to
each holder of Series A Preferred Stock a notice specifying (i) the date on
which any such record is to be taken for the purpose of such dividend,
distribution or right and a description of such dividend, distribution or right,
(ii) the date on which any such reorganization, reclassification, transfer,
merger, dissolution, liquidation or winding up is expected to become effective,
and (iii) the time, if any, that is to be fixed, as to when the holders of
record of Common Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, merger, dissolution, liquidation or winding up. Such notice shall be
mailed at least ten (10) days' prior to the date specified in such notice on
which such action is to be taken.

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