**PORTRAIT
      CORPORATION** **OF AMERICA, INC.**




**CERTIFICATE
      OF THE POWERS, DESIGNATIONS,**




**PREFERENCES
      AND RIGHTS OF THE**




**SERIES A
      REDEEMABLE CONVERTIBLE PREFERRED STOCK,**




**PAR
      VALUE $.01 PER SHARE**




Pursuant
      to Section 151 of the Delaware General Corporation Law




The
      undersigned, Barry J. Feld, President of Portrait Corporation of America, Inc.,
      a Delaware corporation (the “ Corporation ”),
      DOES
      HEREBY CERTIFY that the following resolution, creating a series of 15,287 shares
      of Preferred Stock was duly adopted by the Board of Directors, on July 1,
      2004:




WHEREAS,
      the Board of Directors is authorized, within the limitations and restrictions
      stated in the Certificate of Incorporation of the Corporation, to provide by
      resolution or resolutions for the issuance of shares of Preferred Stock, par
      value $.01 per share, of the Corporation, in one or more classes or series
      with
      such voting powers, full or limited, or no voting powers, and such designations,
      preferences and relative, participating, optional or other special rights,
      and
      qualifications, limitations or restrictions as shall be stated and expressed
      in
      the resolution or resolutions providing for the issuance thereof adopted by
      the
      Board of Directors, and as are not stated and expressed in the Certificate
      of
      Incorporation, or any amendment thereto, including (but without limiting the
      generality of the foregoing) such provisions as may be desired concerning
      voting, redemption, dividends, dissolution or the distribution of assets and
      such other subjects or matters as may be fixed by resolution or resolutions
      of
      the Board of Directors under the General Corporation Law of the State of
      Delaware; and




WHEREAS,
      it is the desire of the Board of Directors, pursuant to its authority as
      aforesaid, to authorize and fix the terms of a series of Preferred Stock and
      the
      number of shares constituting such series.




NOW,
      THEREFORE, BE IT RESOLVED:




1.  Designation
      and Number of Shares .
      There
      shall be hereby established a series of Preferred Stock, par value $.01 per
      share, of Portrait Corporation of America, Inc. (the “ Corporation ”)
      designated as “Series A Redeemable Convertible Preferred Stock” (the
“ Series
      A Preferred Stock ”).
      The
      authorized number of shares of Series A Preferred Stock shall be
      15,287.





2.  Rank .
      The
      Series A Preferred Stock shall, with respect to distributions of assets and
      rights upon the occurrence of an Extraordinary Event (as hereinafter defined)
      or
      Liquidation (as hereinafter defined), rank senior to (a) all classes of common
      stock of the Corporation (including, without limitation, the common stock,
      par
      value $.01 per share, of the Corporation) (the “ Common
      Stock ”)
      and
      (b) each other class or series of Capital Stock of the Corporation hereafter
      created which does not expressly rank pari  passu with or
      senior to the Series A Preferred Stock (the “ Junior
      Stock ”).





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3.  Dividends .
      Beginning on the date of issuance of the Series A Preferred Stock, if the Board
      of Directors of the Corporation shall declare a dividend or make any other
      distribution (including, without limitation, in cash or other property or
      assets), to holders of shares of Common Stock, then the holders of each share
      of
      Series A Preferred Stock shall be entitled to receive, out of funds legally
      available therefor, a dividend or distribution in an amount equal to the amount
      of such dividend or distribution received by a holder of the number of shares
      of
      Common Stock for which such share of Series A Preferred Stock is convertible
      on
      the record date for such dividend or distribution. Any such amount shall be
      paid
      to the holders of shares of Series A Preferred Stock at the same time such
      dividend or distribution is paid to holders of Common Stock.




4.  Liquidation
      Preference/Extraordinary Event Preference .




(a)  For
      the
      purposes of this Section 4, a Liquidation shall mean the voluntary or
      involuntary liquidation, dissolution or winding up of the Corporation. For
      the
      purposes of this Section 4, an Extraordinary Event shall mean (i) the
      voluntary sale, conveyance, exchange or transfer to another Person of all or
      substantially all of the assets of the Corporation (a “ Sale
      of Assets ”),
      and
      (ii)(x) the merger or consolidation of the Corporation with one or more other
      Persons or (y) the merger or consolidation of one or more Persons into or with
      the Corporation, if, in the case of (x) or (y), the stockholders of the
      Corporation prior to such merger or consolidation do not retain at least a
      majority of the voting power of the surviving Person (a “ Merger ”).




(b)  In
      the
      event of any Liquidation, the holders of shares of Series A Preferred Stock
      then
      outstanding shall be entitled to be paid for each share of Series A Preferred
      Stock held thereby, out of the assets of the Corporation available for
      distribution to its stockholders, before any payment shall be made or any assets
      distributed to the holders of any shares of Junior Stock, an amount (the
“ Liquidation
      Amount ”),
      that
      shall be the sum of (i)  the greater of (x) $1,000.00 per share or (y)
      the
      fair market value of the Common Stock for which such share is convertible on
      the
      date fixed for the Liquidation (the “ Liquidation
      Preference ”)
      and
      (ii) all declared and unpaid dividends thereon to the date fixed for
      the
      Liquidation.




In
      the
      event of any Extraordinary Event, the holders of shares of Series A Preferred
      Stock then outstanding shall be entitled to be paid for each share of Series
      A
      Preferred Stock held thereby, out of the assets of the Corporation available
      for
      distribution to its stockholders, before any payment shall be made or any assets
      distributed to the holders of any shares of Junior Stock, an amount (the
“ Extraordinary
      Event Amount ”)
      that
      shall be the sum of (i) $1,000.00 per share (the “ Extraordinary
      Event Preference ”)
      and
      (ii) all declared and unpaid dividends thereon to the date fixed for the
      Extraordinary Event.




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If
      the
      assets of the Corporation are not sufficient to pay in full the foregoing
      Liquidation Amount or Extraordinary Event Amount to the holders of outstanding
      shares of the Series A Preferred Stock, then the holders of all shares of Series
      A Preferred Stock shall share ratably in such distribution of assets in
      accordance with the amount that would be payable on such distribution if the
      amounts to which the holders of outstanding shares of Series A Preferred Stock
      are entitled were paid in full.




(c)  The
      Liquidation Amount and Extraordinary Event Amount payable to the holders of
      shares of Series A Preferred Stock in accordance with Section 4(b) shall be
      payable in cash; provided , however ,
      that in
      the event of a Merger, the Extraordinary Event Amount shall be payable, at
      the
      option of the Corporation, in securities of the surviving Person.




(d)  Written
      notice of a Liquidation or Extraordinary Event shall be delivered in person,
      mailed by certified mail, return receipt requested, mailed by overnight mail
      or
      sent by telecopier, not less than ten (10) days prior to the date of such
      Liquidation or Extraordinary Event, to the holders of record of the Series
      A
      Preferred Stock, such notice to be addressed to each such holder at its address
      as shown by the records of the Corporation.




5.  Redemption .




(a)  On
      or
      after April 30, 2011, the Corporation shall redeem, at the option and
      request of the holder, to the extent it has legally available funds therefor,
      all of the shares of the Series A Preferred Stock at a redemption price
      that shall be the sum of (i) $1,000.00 per share and (ii) all
      declared
      and unpaid dividends thereon to the date fixed for redemption (the “ Redemption
      Price ”).
      In
      the event that the Corporation does not have sufficient legally available funds
      on such date to redeem all outstanding shares of the Series A Preferred
      Stock, then the Corporation shall redeem on such date the number of shares
      of
      the Series A Preferred Stock which it has legally available funds to
      redeem, and the shares of the Series A Preferred Stock not so redeemed
      on
      such date shall be redeemed in whole or from time to time in part on the first
      date on which the Corporation shall have legally available funds for a
      redemption of such shares, subject to Section 5(c) hereof.




(b)  In
      the
      event that less than all the outstanding shares of the Series A Preferred
      Stock are to be redeemed, the number of shares to be redeemed shall be
      determined by the Board of Directors and the shares to be redeemed shall be
      determined pro rata or by lot as may be determined by the Board of Directors,
      in
      its sole discretion, to be equitable.




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(c)  In
      the
      event that the Corporation shall redeem shares of the Series A Preferred
      Stock, notice of such redemption shall be given by first class mail, postage
      prepaid, mailed not less than 30 days nor more than 60 days prior to the date
      of
      such redemption, to each holder of record of the shares to be redeemed at such
      holder’s address as the same appears on the books of the Corporation. Each such
      notice shall state (i) the date of redemption; (ii) the aggregate
      number of shares of the Series A Preferred Stock to be redeemed and,
      if
      fewer than all the shares held by such holder are to be redeemed, the number
      of
      shares to be redeemed from such holder; (iii) the Redemption Price;
      (iv) the place or places where certificates for such shares may be
      surrendered for payment of the Redemption Price; and (v) that dividends
      on
      the shares to be redeemed will cease to accrue on the date of such
      redemption.




(d)  Any
      shares of the Series A Preferred Stock that shall at any time have been
      redeemed or repurchased by the Corporation, or surrendered to the Corporation
      for exchange, in accordance herewith or otherwise, or otherwise acquired by
      the
      Corporation shall, upon such redemption, repurchase, surrender or other
      acquisition, be canceled, and thereafter such shares shall have the status
      of
      authorized but unissued shares of Preferred Stock, without designation as to
      rights, preferences, limitations or series until such shares are once more
      designated as part of a particular series with particular rights, preferences
      or
      limitations by the Board of Directors or a duly authorized committee thereof; provided ,
      that no
      such issued and reacquired shares of Series A Preferred Stock shall
      be
      reissued or sold as Series A Preferred Stock.




(e)  On
      or
      after any date of redemption, unless the Corporation defaults in the payment
      of
      the Redemption Price, dividends will cease to accrue on the outstanding shares
      of Series A Preferred Stock called for redemption and all rights of
      the
      holders of such shares (except the right to receive the applicable Redemption
      Price upon surrender of their certificates) will terminate.




6.  Voting
      Rights; Election of Director .




(a)  The
      holders of Series A Preferred Stock, except as otherwise required under Delaware
      law or as set forth in Sections (b) and (c) below, shall not be entitled
      or
      permitted to vote on any matter required or permitted to be voted upon by the
      stockholders of the Corporation.




(b)  So
      long
      as the Series A Preferred Stock is outstanding, each share of Series A
      Preferred Stock shall entitle the holder thereof to vote, in person or by proxy,
      at a special or annual meeting of stockholders, on all matters entitled to
      be
      voted on by holders of Common Stock voting together as a single class with
      other
      shares entitled to vote thereon. With respect to any such vote, each share
      of
      Series A Preferred Stock shall entitle the holder thereof to cast that
      number of votes per share as is equal to the number of votes that such holder
      would be entitled to cast had such holder converted its shares of Series A
      Preferred Stock into shares of Common Stock on the record date for determining
      the stockholders of the Corporation eligible to vote on any such
      matters.




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(c)  The
      holders of the Series A Preferred Stock, voting as a separate series, shall
      be
      entitled to elect one director of the Corporation. The Series A Preferred Stock
      shall vote together with all other classes and series of stock of the
      Corporation as a single class with respect to the election of all of the other
      directors of the Corporation. At any meeting (or in a written consent in lieu
      thereof) held for the purpose of electing directors, the presence in person
      or
      by proxy (or the written consent) of the holders of a majority of the shares
      of
      Series A Preferred Stock then outstanding shall constitute a quorum of the
      Series A Preferred Stock for the election of the director to be elected solely
      by the holders of the Series A Preferred Stock. A vacancy in the directorship
      elected by the holders of the Series A Preferred Stock pursuant to this Section
      6(c) shall be filled only by vote or written consent of the holders of a
      majority of the Series A Preferred Stock.




7.  Conversion .




(a)  Any
      holder of Series A Preferred Stock shall have the right, at its option,
      at
      any time and from time to time, to convert, subject to the terms and provisions
      of this Section 7, any or all of such holder’s shares of Series A
      Preferred Stock into such number of fully paid and non-assessable shares of
      Common Stock as is equal, subject to Section 7(g), to a fraction, the numerator
      of which shall be the product of (i) the number of shares of Series A
      Preferred Stock being so converted and (ii) the Extraordinary Event
      Preference and the denominator of which shall be the Conversion Price (as
      defined below) then in effect, except that with respect to any share which
      shall
      be called for redemption, in connection with the request of such holder, such
      right shall terminate at the close of business on the Business Day immediately
      prior to the date of redemption for such share, unless in any such case the
      Corporation shall default in performance or payment due upon redemption thereof.
      The “ Conversion
      Price” shall be
      $8.00 per share, subject to adjustment as set forth in Section 7(d).
      Such
      conversion right shall be exercised by the surrender of the shares of
      Series A Preferred Stock to be converted (the “ Shares ”)
      to the
      Corporation at any time during usual business hours at its principal place
      of
      business to be maintained by it, accompanied by written notice that the holder
      elects to convert such Shares and specifying the name or names (with address)
      in
      which a certificate or certificates for shares of Common Stock are to be issued
      and (if so required by the Corporation) by a written instrument or instruments
      of transfer in form reasonably satisfactory to the Corporation duly executed
      by
      the holder or its duly authorized legal representative and transfer tax stamps
      or funds therefor, if required pursuant to Section 7(k). All Shares surrendered
      for conversion shall be delivered to the Corporation for cancellation and
      canceled by it and no Shares shall be issued in lieu thereof.




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(b)  As
      promptly as practicable after the surrender, as herein provided, of any Shares
      for conversion pursuant to Section 7(a), the Corporation shall deliver to or
      upon the written order of the holder of the Shares so surrendered a certificate
      or certificates representing the number of fully paid and non-assessable shares
      of Common Stock into which such Shares may be or have been converted in
      accordance with the provisions of this Section 7. Subject to the following
      provisions of this Section 7, such conversion shall be deemed to have been
      made
      immediately prior to the close of business on the date that such Shares shall
      have been surrendered in satisfactory form for conversion, and the Person or
      Persons entitled to receive the Common Stock deliverable upon conversion of
      such
      Shares shall be treated for all purposes as having become the record holder
      or
      holders of such Common Stock at such appropriate time, and such conversion
      shall
      be at the Conversion Price in effect at such time; provided , however ,
      that no
      surrender shall be effective to constitute the Person or Persons entitled to
      receive the Common Stock deliverable upon such conversion as the record holder
      or holders of such Common Stock while the share transfer books of the
      Corporation shall be closed (but not for any period in excess of five days),
      but
      such surrender shall be effective to constitute the Person or Persons entitled
      to receive such Common Stock as the record holder or holders thereof for all
      purposes immediately prior to the close of business on the next preceding day
      on
      which such share transfer books are open, and such conversion shall be deemed
      to
      have been made at, and shall be made at the Conversion Price in effect at,
      such
      time on such next preceding day. In case of the redemption of any shares of
      Series A Preferred Stock pursuant to Section 5(a), the right of conversion
      shall cease and terminate, as to the shares to be redeemed, at the close of
      business on the Business Day immediately prior to the date fixed for redemption,
      unless the Corporation shall default (I) in the payment of the applicable
      redemption price for the shares to be redeemed or the amounts, if any, payable
      pursuant to Section 7(c) or (II) in the performance of its obligation
      to issue Common Stock in exchange therefor, as the case may be.




If
      the
      last day for the exercise of the conversion right shall not be a Business Day,
      then such conversion right may be exercised on the next succeeding Business
      Day.




(c)  To
      the
      extent permitted by law, when shares of Series A Preferred Stock are
      converted, all dividends accrued and unpaid (whether or not declared or
      currently payable) on the Series A Preferred Stock so converted to the
      date
      of conversion shall be immediately due and payable and must accompany the shares
      of Common Stock issued upon such conversion.




(d)  The
      Conversion Price shall be subject to adjustment as follows:




(i)  In
      case
      the Corporation shall at any time or from time to time (A) pay a dividend
      or make a distribution (other than a dividend or distribution paid or made
      to
      holders of shares of Series A Preferred Stock in the manner provided
      in
      Section 3) on the outstanding shares of any of the Common Stock in Capital
      Stock
      (which, for purposes of this Section 7(d)(i) shall include, without limitation,
      any dividends or distributions in the form of options, warrants or other rights
      to acquire capital stock) of the Corporation or any Subsidiary or Affiliate
      thereof, (B) subdivide the outstanding shares of any of the Common Stock
      into a larger number of shares, (C) combine the outstanding shares of
      any
      of the Common Stock into a smaller number of shares, (D) issue any shares
      of its capital stock in a reclassification of any of the Common Stock or
      (E) pay a dividend or make a distribution (other than a dividend or
      distribution paid or made to holders of shares of Series A Preferred
      Stock
      in the manner provided in Section 3) on the outstanding shares of any of the
      Common Stock in shares of its Capital Stock pursuant to a shareholder rights
      plan, “poison pill” or similar arrangement, then, and in each such case, the
      Conversion Price in effect immediately prior to such event shall be adjusted
      (and any other appropriate actions shall be taken by the Corporation) so that
      the holder of any share of Series A Preferred Stock thereafter surrendered
      for conversion shall be entitled to receive the number of shares of Common
      Stock
      or other securities of the Corporation that such holder would have owned or
      would have been entitled to receive upon or by reason of any of the events
      described above, had such share of Series A Preferred Stock been converted
      immediately prior to the occurrence of such event. An adjustment made pursuant
      to this Section 7(d)(i) shall become effective retroactively (A) in the case
      of
      any such dividend or distribution, to a date immediately following the close
      of
      business on the record date for the determination of holders of any of Common
      Stock entitled to receive such dividend or distribution or (B) in the case
      of
      any such subdivision, combination or reclassification, to the close of business
      on the day upon which such corporate action becomes effective.




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(ii)  In
      case
      the Corporation shall at any time or from time to time issue or sell shares
      of
      any of its Common Stock (or securities convertible into or exchangeable for
      shares of its Common Stock, or any options, warrants or other rights to acquire
      shares of its Common Stock) (A) if there is no Active Public Market at such
      time
      for the Common Stock, at a price per share that is less than the higher of
      the
      then Conversion Price and the Current Market Price per share of such Common
      Stock then in effect as of the record date or Issue Date referred to in the
      following sentence, as the case may be (the “ Relevant
      Date ”),
      or
      (B) if there is an Active Public Market at such time for the Common Stock,
      at a
      price per share that is less than the Current Market Price per share of such
      Common Stock then in effect at the Relevant Date (treating the price per share
      of Common Stock, in the case of the issuance of any security convertible or
      exchangeable or exercisable into Common Stock, as equal to (m) the sum of the
      price for such security convertible, exchangeable or exercisable into Common
      Stock plus any additional consideration payable (without regard to any
      anti-dilution adjustments) upon the conversion, exchange or exercise of such
      security into Common Stock divided by (n) the number of shares of Common
      Stock initially underlying such convertible, exchangeable or exercisable
      security), other than (I) issuances or sales for which an adjustment
      is
      made pursuant to another Section of this Section 7(d) and (II) issuances
      which are made to holders of shares of Series A Preferred Stock pursuant to
      Section 3, then, and in each such case, the Conversion Price then in effect
      shall be adjusted by dividing the Conversion Price in effect on the day
      immediately prior to such Relevant Date by a fraction (x) the numerator of
      which
      shall be the sum of the number of shares of Common Stock outstanding on the
      Relevant Date plus the number of additional shares of Common Stock issued or
      to
      be issued (or the maximum number into which such convertible or exchangeable
      securities initially may convert or exchange or for which such options, warrants
      or other rights initially may be exercised) and (y) the denominator of which
      shall be the sum of the number of shares of Common Stock outstanding on the
      Relevant Date plus the number of shares of Common Stock which the aggregate
      consideration for the total number of such additional shares of Common Stock
      so
      issued (or into which such convertible or exchangeable securities may convert
      or
      exchange or for which such options, warrants or other rights may be exercised
      plus the aggregate amount of any additional consideration initially payable
      upon
      conversion, exchange or exercise of such security) would purchase at the Current
      Market Price per share of Common Stock on the Relevant Date. Such adjustment
      shall be made whenever such shares, securities, options, warrants or other
      rights are issued, and shall become effective retroactively to a date
      immediately following the close of business (i) in the case of an issuance
      to the stockholders of the Corporation, as such, on the record date for the
      determination of stockholders entitled to receive such shares, securities,
      options, warrants or other rights and (ii) in all other cases, on the
      date
      of such issuance (the “ Issue
      Date ”); provided , however ,
      that
      the determination as to whether an adjustment is required to be made pursuant
      to
      this Section 7(d)(ii) shall only be made upon the issuance of such shares
      or such convertible or exchangeable securities, options, warrants or other
      rights, and not upon the issuance of the security into which such convertible
      or
      exchangeable security converts or exchanges, or the security underlying such
      option, warrants or other right; provided , further ,
      that if
      any convertible or exchangeable securities, options, warrants or other rights
      (or any portions thereof) which shall have given rise to an adjustment pursuant
      to this Section 7(d)(ii) shall have expired or terminated without the exercise
      thereof and/or if by reason of the terms of such convertible or exchangeable
      securities, options, warrants or other rights there shall have been an increase
      or increases, with the passage of time or otherwise, in the price payable upon
      the exercise or conversion thereof, then the Conversion Price hereunder shall
      be
      readjusted (but to no greater extent than originally adjusted) on the basis
      of
      (x) eliminating from the computation any additional shares of Common Stock
      corresponding to such convertible or exchangeable securities, options, warrants
      or other rights as shall have expired or terminated, (y) treating the additional
      shares of Common Stock, if any, actually issued or issuable pursuant to the
      previous exercise of such convertible or exchangeable securities, options,
      warrants or other rights as having been issued for the consideration actually
      received and receivable therefor and (z) treating any of such convertible or
      exchangeable securities, options, warrants or other rights which remain
      outstanding as being subject to exercise or conversion on the basis of such
      exercise or conversion price as shall be in effect at the time.




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(iii)  In
      case
      the Corporation shall at any time or from time to time distribute to all holders
      of shares of its Common Stock (including any such distribution made in
      connection with a consolidation or merger in which the Corporation is the
      resulting or surviving corporation and the Common Stock is not changed or
      exchanged) cash, evidences of indebtedness of the Corporation or another issuer,
      securities of the Corporation or another issuer or other assets (excluding
      (A)
      dividends or distributions paid or made to holders of shares of Series A
      Preferred Stock in the manner provided in Section 3 and (B) dividends payable
      in
      shares of Common Stock for which adjustment is made under Section 7(d)(i))
      or
      rights or warrants to subscribe for or purchase securities of the Corporation
      (excluding those in respect of which adjustments in the Conversion Price is
      made
      pursuant to Section 7(d)(i) or 7(d)(ii)), then, and in each such case, the
      Conversion Price then in effect shall be adjusted by dividing the Conversion
      Price in effect immediately prior to the date of such distribution by a fraction
      (x) the numerator of which shall be the Current Market Price of the Common
      Stock
      on the record date referred to below and (y) the denominator of which
      shall
      be such Current Market Price of the Common Stock less the then fair market
      value
      (as determined in good faith by the Board of Directors of the Corporation,
      a
      certified resolution with respect to which shall be mailed to the holders of
      the
      Series A Preferred Stock) of the portion of the cash, evidences of
      indebtedness, securities or other assets so distributed or of such subscription
      rights or warrants applicable to one share of Common Stock (but such denominator
      not to be less than one); provided , however ,
      that no
      adjustment shall be made with respect to any distribution of rights to purchase
      securities of the Corporation if the holder of shares of Series A Preferred
      Stock would otherwise be entitled to receive such rights upon conversion at
      any
      time of shares of Series A Preferred Stock into Common Stock unless
      such
      rights are subsequently redeemed by the Corporation, in which case such
      redemption shall be treated for purposes of this Section 7(d)(iii) as a dividend
      on the Common Stock. Such adjustment shall be made whenever any such
      distribution is made and shall become effective retroactively to a date
      immediately following the close of business on the record date for the
      determination of stockholders entitled to receive such
      distribution.




(iv)  In
      case
      the Corporation at any time or from time to time shall take any action affecting
      its Common Stock other than an action described in any of Section 4 or Section
      7(d)(i) through 7(d)(iii), inclusive, then, the Conversion Price shall be
      adjusted in such manner and at such time as the Board of Directors of the
      Corporation in good faith determines to be equitable in the circumstances (such
      determination to be evidenced in a resolution, a certified copy of which shall
      be mailed to the holders of the Series A Preferred Stock).




(v)  Notwithstanding
      anything herein to the contrary, no adjustment under this Section 7(d) need
      be
      made to the Conversion Price unless such adjustment would require an increase
      or
      decrease of at least 1% of the Conversion Price then in effect. Any lesser
      adjustment shall be carried forward and shall be made at the time of and
      together with the next subsequent adjustment, which, together with any
      adjustment or adjustments so carried forward, shall amount to an increase or
      decrease of at least 1% of such Conversion Price. Any adjustment to the
      Conversion Price carried forward and not theretofore made shall be made
      immediately prior to the conversion of any shares of Series A Preferred
      Stock pursuant hereto.




(e)  If
      the
      Corporation shall take a record of the holders of any of the Common Stock for
      the purpose of entitling them to receive a dividend or other distribution,
      and
      shall thereafter and before the distribution to stockholders thereof legally
      abandon its plan to pay or deliver such dividend or distribution, then
      thereafter no adjustment in the Conversion Price then in effect shall be
      required by reason of the taking of such record.




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(f)  Upon
      any
      increase or decrease in the Conversion Price, then, and in each such case,
      the
      Corporation promptly shall deliver to each registered holder of Series A
      Preferred Stock at least 10 Business Days prior to effecting any of the
      foregoing transactions a certificate, signed by the President or a
      Vice-President and by the Treasurer or an Assistant Treasurer or the Secretary
      or an Assistant Secretary of the Corporation, setting forth in reasonable detail
      the event requiring the adjustment and the method by which such adjustment
      was
      calculated and specifying the increased or decreased Conversion Price then
      in
      effect following such adjustment.




(g)  No
      fractional shares or scrip representing fractional shares shall be issued upon
      the conversion of any shares of Series A Preferred Stock pursuant to
      this
      Section 7. If more than one share of Series A Preferred Stock shall
      be
      surrendered for conversion at one time by the same holder, the number of full
      shares of Common Stock issuable upon conversion thereof shall be computed on
      the
      basis of the aggregate number of the shares of Series A Preferred Stock
      so
      surrendered. If the conversion of any share or shares of Series A Preferred
      Stock pursuant to this Section 7 results in a fraction, an amount equal to
      such
      fraction multiplied by the Current Market Price of the Common Stock on the
      Business Day preceding the day of conversion shall be paid to such holder in
      cash by the Corporation.




(h)  In
      case
      of any capital reorganization or reclassification or other change of outstanding
      shares of Common Stock (other than a change in par value, or from par value
      to
      no par value, or from no par value to par value) (collectively, a “ Reclassification ”),
      the
      Corporation shall execute and deliver to each holder of Series A Preferred
      Stock
      at least 10 Business Days prior to effecting a Reclassification a certificate
      that the holder of each share of Series A Preferred Stock then outstanding
      shall
      have the right thereafter to convert such share of Series A Preferred Stock
      into
      the kind and amount of shares of stock or other securities receivable upon
      such
      Reclassification by a holder of the number of shares of Common Stock into which
      such share of Series A Preferred Stock could have been converted immediately
      prior to such Reclassification. Such certificate shall provide for adjustments
      which shall be as nearly equivalent as may be practicable to the adjustments
      provided for in this Section 7. The provisions of this Section 7(h) and any
      equivalent thereof in any such certificate similarly shall apply to successive
      Reclassifications.




(i)  In
      case
      at any time or from time to time:




(A)  the
      Corporation shall declare a dividend (or any other distribution) on the Common
      Stock;




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(B)  the
      Corporation shall authorize the granting to the holders of the Common Stock
      of
      rights or warrants to subscribe for or purchase any shares of stock of any
      class
      or of any other rights or warrants;




(C)  there
      shall be any reclassification of the Common Stock, or any consolidation or
      merger to which the Corporation is a party and for which approval of any
      shareholders of the Corporation is required, or any sale or other disposition
      of
      all or substantially all of the assets of the Corporation; or




(D)  of
      the
      voluntary or involuntary dissolution, liquidation or winding up of the
      Corporation;




then
      the
      Corporation shall mail to each holder of shares of Series A Preferred
      Stock
      at such holder’s address as it appears on the transfer books of the Corporation,
      as promptly as possible but in any event at least ten Business Days prior to
      the
      applicable date hereinafter specified, a notice stating (x) the date
      on
      which a record is to be taken for the purpose of such dividend, distribution
      or
      rights or warrants or, if a record is not to be taken, the date as of which
      the
      holders of Common Stock of record to be entitled to such dividend, distribution
      or rights are to be determined, or (y) the date on which such reclassification,
      consolidation, merger, sale, conveyance, dissolution, liquidation or winding
      up
      is expected to become effective; provided that in
      the case of any event to which Section 4 applies, the Corporation shall give
      at
      least 10 Business Days’ prior written notice as aforesaid. Such notice also
      shall specify the date as of which it is expected that holders of Common Stock
      of record shall be entitled to exchange their Common Stock for shares of stock
      or other securities or property or cash deliverable upon such reclassification,
      consolidation, merger, sale, conveyance, dissolution, liquidation or winding
      up.




(j)  The
      Corporation shall at all times reserve and keep available for issuance upon
      the
      conversion of the Series A Preferred Stock, such number of its authorized
      but unissued shares of Common Stock as will from time to time be sufficient
      to
      permit the conversion of all outstanding shares of Series A Preferred
      Stock, and shall take all action required to increase the authorized number
      of
      shares of Common Stock if at any time there shall be insufficient authorized
      but
      unissued shares of Common Stock to permit such reservation or to permit the
      conversion of all outstanding shares of Series A Preferred
      Stock.




(k)  The
      issuance or delivery of certificates for Common Stock upon the conversion of
      shares of Series A Preferred Stock pursuant to this Section 7 shall
      be made
      without charge to the converting holder of shares of Series A Preferred
      Stock for such certificates or for any tax in respect of the issuance or
      delivery of such certificates or the securities represented thereby, and such
      certificates shall be issued or delivered in the respective names of, or in
      such
      names as may be directed by, the holders of the shares of Series A
      Preferred Stock converted; provided , however ,
      that
      the Corporation shall not be required to pay any tax 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 shares of
      Series A Preferred Stock converted, and the Corporation shall not be
      required to issue or deliver such certificate unless or until the Person or
      Persons requesting the issuance or delivery thereof shall have paid to the
      Corporation the amount of such tax or shall have established to the reasonable
      satisfaction of the Corporation that such tax has been paid.




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8.  Business
      Day .
      If any
      payment shall be required by the terms hereof to be made on a day that is not
      a
      Business Day, such payment shall be made on the immediately succeeding Business
      Day.




9.  Restricted
      Actions .
      Notwithstanding any provision to the contrary contained in these resolutions,
      the Corporation shall not be required to make any payments to its stockholders,
      including without limitation any Liquidation Preference or any Extraordinary
      Event Preference, redeem any capital stock, including without limitation any
      shares of the Series A Preferred Stock, or take any other action in
      connection with its stockholders, as set forth in this Certificate or otherwise,
      to the extent that at such time the terms of any financing or working capital
      agreement of the Corporation or by which the Corporation is bound, would
      prohibit such payment, redemption or other action, or if such payment,
      redemption or other action would constitute a breach thereof or a default
      thereunder or if such payment, redemption or other action would, upon the giving
      of notice or passage of time or both, constitute such breach or
      default.




10.  Definitions .
      As used
      in these resolutions, the following terms shall have the following meanings
      (with terms defined in the singular having comparable meanings when used in
      the
      plural and vice  versa ),
      unless
      the context otherwise requires:




“ Active
      Public Market ”
      shall
      be deemed to exist if, at the time of determination, (i) the Common
      Stock
      is listed on one or more national securities exchanges in the United States
      or
      (ii) the Common Stock is quoted on NASDAQ and has an average daily volume
      of at least .4% of the outstanding shares for the preceding six months prior
      to
      such date.




“ Board
      of Directors ”
      means
      the Board of Directors of the Corporation.




“ Business
      Day ”
      means
      any day except a Saturday, a Sunday, or other day on which commercial banks
      in
      the State of Delaware are authorized or required by law or executive order
      to
      close.




“ Capital
      Stock ”
      means,
      with respect to any Person, any and all shares, interests, participations,
      rights in, or other equivalents (however designated and whether voting or
      non-voting) of, such Person’s capital stock and any and all rights, warrants or
      options exchangeable for or convertible into such capital stock (but excluding
      any debt security that is exchangeable for or convertible into such capital
      stock).




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“ Commission ”
      means
      the Securities and Exchange Commission or any similar agency then having
      jurisdiction to enforce the Securities Act.




“ Common
      Stock ”
      shall
      have the meaning ascribed to it in Section 2 hereof.




“ Conversion
      Price ”
      shall
      have the meaning ascribed to it in Section 7(a) hereof.




“ Corporation ”
      shall
      have the meaning ascribed to it in the first Section of this
      Resolution.




“ Current
      Market Price ”
      per
      share shall mean, on any date specified herein for the determination thereof,
      (a) the average daily Market Price of the Common Stock for those days
      during the period of 30 days, ending on such date, on which the national
      securities exchanges were open for trading, and (b) if the Common Stock
      is
      not then listed or admitted to trading on any national securities exchange
      or
      quoted in the over-counter market, the Market Price on such date.




“ Exchange
      Act ”
      means
      the Securities Exchange Act of 1934, and the rules and regulations of the
      Commission promulgated thereunder.




“ Extraordinary
      Event ”
      shall
      have the meaning ascribed to it in Section 4(a) hereof.




“ Extraordinary
      Event Amount ”
      shall
      have the meaning ascribed to it in Section 4(b) hereof.




“ Extraordinary
      Event Preference ”
      shall
      have the meaning ascribed to it in Section 4(b) hereof.




“ Issue
      Date ”
      shall
      have the meaning ascribed to it in Section 7(d)(ii) hereof.




“ Junior
      Stock ”
      shall
      have the meaning ascribed to it in Section 2 hereof.




“ Liquidation ”
      shall
      have the meaning ascribed to it in Section 4(a) hereof.




“ Liquidation
      Amount ”
      shall
      have the meaning ascribed to it in Section 4(b) hereof.




“ Liquidation
      Preference ”
      shall
      have the meaning ascribed to it in Section 4(b) hereof.




“ Market
      Price ”
      shall
      mean, per share of Common Stock, on any date specified herein: (a) the closing
      price per share of the Common Stock on such date published in The
      Wall Street Journal or, if
      no such closing price on such date is published in The
      Wall Street Journal ,
      the
      average of the closing bid and asked prices on such date, as officially reported
      on the principal national securities exchange on which the Common Stock is
      then
      listed or admitted to trading; or (b) if the Common Stock is not then listed
      or
      admitted to trading on any national securities exchange but is designated as
      a
      national market system security by the NASD, the last trading price of the
      Common Stock on such date; or (c) if there shall have been no trading on such
      date or if the Common Stock is not so designated, the average of the reported
      closing bid and asked prices of the Common Stock, on such date as shown by
      NASDAQ and reported by any member firm of the New York Stock Exchange selected
      by the Corporation; or (d) if none of (a), (b) or (c) is applicable, a market
      price per share determined at the Corporation’s expense by an appraiser chosen
      by the holders of a majority of the shares of Series A Preferred Stock
      or,
      if no such appraiser is so chosen more than 20 business days after notice of
      the
      necessity of such calculation shall have been delivered by the Corporation
      to
      the holders of Series A Preferred Stock, then by an appraiser chosen
      by the
      Corporation.




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          12
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“ Merger ”
      shall
      have the meaning ascribed to it in Section 4(a) hereof.




“ NASD ”
      shall
      mean the National Association of Securities Dealers, Inc.




“ NASDAQ ”
      shall
      mean the National Market System of the National Association of Securities
      Dealers, Inc. Automated Quotations System.




“ Person ”
      means
      any individual, firm, corporation, partnership, limited liability company,
      trust, incorporated or unincorporated association, joint venture, joint stock
      company, governmental body or other entity of any kind.




“ Reclassification ”
      shall
      have the meaning ascribed to it in Section 7(h) hereof.




“ Redemption
      Price ”
      shall
      have the meaning ascribed to it in Section 5(a) hereof.




“ Relevant
      Date ”
      shall
      have the meaning ascribed to it in Section 7(d)(ii) hereof.




“ Sale
      of Assets ”
      shall
      have the meaning ascribed to it in Section 4(a) hereof.




“ Securities
      Act ”
      means
      the Securities Act of 1933, as amended, and the rules and regulations of the
      Commission promulgated thereunder.




“ Series
      A Preferred Stock ”
      shall
      have the meaning ascribed to it in Section 1 hereof.




“ Shares ”
      shall
      have the meaning ascribed to it in Section 7(a) hereof.









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          13
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IN
      WITNESS WHEREOF, the undersigned has executed and subscribed this certificate
      this 3rd  day of
      August, 2004.






/s/
      Barry J. Feld


Barry
      J.
      Feld


President