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                                                                     Exhibit 3.1

                             ARTICLES OF RESTATEMENT
                                       OF
                             PCA INTERNATIONAL, INC.

        Pursuant to Section 55-10-07 of the General Statutes of North Carolina,
the undersigned corporation hereby submits these Articles of Restatement for the
purpose of integrating into one document its original articles of incorporation
and all amendments thereto and also for the purpose of amending its articles of
incorporation:

        1.      The name of the corporation is PCA International, Inc.

        2.      Attached hereto as an exhibit are the amended and restated
articles of incorporation, which contain amendments to the articles of
incorporation requiring shareholder approval.

        3.      The amended and restated articles of incorporation of the
corporation were adopted by the shareholders of the corporation on the     day
of                2002, in the manner prescribed by law.

        4.      The amended and restated articles of incorporation shall be
effective upon filing.

        This the        day of            2002.

                                          PCA INTERNATIONAL, INC.

                                          By:
                                              ------------------------
                                              J. Robert Wren, Secretary

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                 AMENDED AND RESTATED ARTICLES OF INCORPORATION
                                       OF
                             PCA INTERNATIONAL, INC.

                                    ARTICLE I

                                     GENERAL

        1.1     Corporate Name. The name of the corporation is PCA
International, Inc. (hereinafter the "Corporation").

        1.2     Duration. The period of duration of the Corporation shall be
perpetual.

        1.3     Purpose. The purposes for which the Corporation is organized
are: to engage for profit in the business of commercial and portrait
photography, including, without limitation, photography and finishing, amateur
photo-finishing, school photography and promotional photography; to engage for
profit in the business of printing, photography, and all related operations in
the field of graphic art; and to engage in any other lawful business for profit.

                                   ARTICLE II

                                AUTHORIZED SHARES

        2.1     Authorized Shares. The number of shares the Corporation is
authorized to issue is Twenty Two Million Sixty Nine Thousand Seven Hundred
Ninety (22,069,790), divided into Twenty Million (20,000,000) shares of common
stock, par value of twenty cents ($.20) per share ("Common Stock"), Sixty Nine
Thousand Seven Hundred Ninety (69,790) shares of preferred stock, par value of
eight dollars ($8.00) per share ("Eight Dollar Preferred Stock"), and Two
Million (2,000,000) shares of preferred stock, par value of ten dollars ($10.00)
per share ("Ten Dollar Preferred Stock").

        The preferences, limitations and relative rights of each class and
series of shares are as set forth in this Article II:

        2.2     Common Stock.

        (a)     Voting. At all times each holder of a share of Common Stock of
the Corporation shall be entitled to one vote per share standing in the name of
such holder on the books of the Corporation.

        (b)     Dividends and Assets. In the matter of dividends and assets, the
rights of the Common Stock shall be junior to the rights of the classes of
preferred stock as herein after provided.

        (c)     General Rights. In addition to the foregoing rights regarding
voting and dividends and assets the holders of the Common Stock of the
Corporation shall have all rights

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and privileges of the shareholders of the Corporation except such rights,
preferences and privileges as are expressly granted to the holders of the
preferred stock of the Corporation in accordance with the provisions hereinafter
set forth and such rights as are accorded to the holders of the preferred stock
by law which cannot by the terms hereof be waived.

        (d)     Preemptive Rights. No holder of shares of Common Stock as such
shall have any preemptive rights to subscribe to shares, obligations, warrants
or other securities of the corporation of any class, whether now or hereafter
authorized.

        2.3     Preferred Stock (par value $8.00 per share).

        (a)     Issuance. All or any part of the Eight Dollar Preferred Stock
may be issued by the Corporation from time to time, as may be determined by the
Board of Directors as provided by law.

        (b)     Dividends. Before any dividends on the Common Stock of the
Corporation shall be paid, or declared or set apart for payment, the holders of
Eight Dollar Preferred Stock shall be entitled to receive cumulative dividends,
when and as declared by the Board of Directors, at the rate of 8% per share per
annum, and no more, payable quarterly on the first day of each of the months of
January, April, July and October of each year. Such dividends shall commence to
accrue and be cumulative from and after the date upon which such shares are
issued.

        (c)     Redemptions. The Corporation may at any time, at the option of
the Board of Directors, redeem the whole or any part of the Eight Dollar
Preferred Stock at the time outstanding, upon notice duly mailed as hereinafter
provided, by paying or providing for the payment in cash of the redemption price
for such shares plus an amount equal to dividends accrued and unpaid to the date
of redemption; provided, however that any such redemption shall be approved by a
majority of the disinterested directors. For purposes of the preceding sentence,
disinterested directors are those directors who do not own, directly or
indirectly, any interest in the Eight Dollar Preferred Stock. The redemption
price shall be Eight Dollars ($8.00) per share. Not less than thirty days
previous notice of every such redemption of the Eight Dollar Preferred Stock
shall be mailed to the holders of record of the shares to be redeemed at their
last known address as shown on the records of the Corporation.

                In case of the redemption of a part only of any shares of the
Eight Dollar Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected pro rata or by lot, or not pro rata or not by lots or in such
other manner as the Board of Directors of the Corporation from time to time may
determine. The Board of Directors of the Corporation shall have full power and
authority to effect the redemption of, to prescribe the manner in which, and,
subject to the provisions and limitations herein contained, the terms and
conditions upon which such stock shall be redeemed from time to time.

                If, after notice of redemption of any such Eight Dollar
Preferred Stock shall have been duly mailed as hereinabove provided, or
irrevocable authorization and direction for such mailing shall have been given
to the bank or trust company hereinafter mentioned, and if on or before the
redemption date designated in such notice the Corporation shall deposit in trust
with any bank or trust company named in such notice, to be applied to the
redemption of the Eight

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Dollar Preferred Stock so called for redemption, funds sufficient to redeem such
stock upon the date specified in the notice of redemption, then from and after
the time of such deposit all shares of such Eight Dollar Preferred Stock for the
redemption of which such deposit shall have been made shall, whether or not the
certificates therefor have been surrendered for cancellation, be deemed no
longer to be outstanding for any purpose and all rights with respect to such
shares shall thereupon cease and terminate, except the right to receive the
redemption price so deposited (without interest) which price shall include
dividends accrued and unpaid to the date of such deposit. Any funds deposited
and unclaimed at the end of five years from the date fixed for redemption shall
be repaid to the Corporation free of trust, and such holders of such Eight
Dollar Preferred Stock so called for redemption as shall not have received the
redemption price prior to the expiration of such five years shall be deemed to
be unsecured creditors of the Corporation for the redemption price of their
shares and shall look only to the Corporation for payment thereof without
interest. Shares redeemed pursuant to this paragraph of Section 2.3(c) shall be
retired and not reissued.

                Whenever used herein with reference to the shares of the Eight
Dollar Preferred Stock the term "redemption price" shall mean the sum of the par
value and all dividends accrued and unpaid thereon to the date of redemption;
and the term "dividends accrued" shall mean an amount computed at the annual
dividend rate from the date or dates on which dividends on such shares, less the
aggregate of the dividends theretofore or on such date paid thereon.

        (d)     Dividend Restrictions; Shareholders' Consent. So long as any
Eight Dollar Preferred Stock shall be outstanding, the Corporation shall not (a)
pay or declare any dividend whatsoever, whether in cash, stock or otherwise, or
make any distribution in respect of the Common Stock of the Corporation, or
purchase, redeem or otherwise acquire any Common Stock, or set any funds apart
for such purposes, unless all dividends accrued and unpaid with respect to the
Eight Dollar Preferred Stock shall have been paid or funds for the payment
thereof irrevocably set aside in trust; or (b) without the affirmative vote of
the holders of at least a majority in interest of the Eight Dollar Preferred
Stock then outstanding, amend, alter, or repeal any of the provisions of the
Eight Dollar Preferred Stock so as to affect adversely the preferences, rights,
or powers of Eight Dollar Preferred Stock.

        (e)     Voting. At all times each holder a of share of the Eight Dollar
Preferred Stock of the Corporation shall be entitled to one vote for each such
share standing in the name of such holder on the books of the Corporation.

        (f)     Conversion. Each share of Eight Dollar Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the last day
of the sixtieth month next succeeding the date of issue of such share, upon
surrender to the Corporation of the certificates for the shares to be converted,
into fully paid and nonassessable Common Stock of the Corporation, at the rate
of one share of Common Stock for each share of Eight Dollar Preferred Stock;
provided that, in the case of the call for redemption of any shares of Eight
Dollar Preferred Stock, such right of conversion shall terminate as to the
shares called for redemption at the close of business on the date fixed for
redemption. The conversion rate shall be subject to adjustment from time to
time, so as to preserve to the holders of the Eight Dollar Preferred Stock their
conversion rights substantially without diminution, by taking into account any
and all increases or decreases in the number of outstanding shares of Common
Stock which may occur

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after the date of issue of any share of Eight Dollar Preferred Stock resulting
from a combination of stock, a stock split, stock dividend or any other issue of
Common Stock without consideration. The Corporation shall at all times reserve
and keep available out of its authorized but unissued Common Stock the full
number of shares of Common Stock deliverable upon the conversion of all Eight
Dollar Preferred Stock from time to time outstanding.

        (g)     Assets. In the event of any involuntary or voluntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of the Eight Dollar Preferred Stock shall be entitled to receive Eight
Dollars ($8.00) per share plus the amount of any accrued and unpaid dividends.
In the event of either an involuntary or voluntary liquidation, dissolution or
winding up of the affairs of the Corporation, the amounts payable to the holders
of the Eight Dollar Preferred Stock under the foregoing provisions shall be paid
in full before any payment or any distribution of assets whatsoever is made to
or set aside for the holders of Common Stock of the Corporation.

        (h)     Preemptive Right. No holder of shares of Eight Dollar Preferred
Stock, as such, shall have any preemptive right to subscribe for shares,
obligations, warrants, or other securities of the corporation of any class,
whether now or hereafter authorized.

        2.4     Preferred Stock (par value $10.00 per share).

        (a)     Issuance in Series. The Ten Dollar Preferred Stock may be issued
from time to time by the Board of Directors as shares of one or more series of
Ten Dollar Preferred Stock, with such distinctive serial designations as shall
be stated and expressed herein or in the resolution or resolutions of the Board
of Directors providing for the issue of such stock. In the resolution or
resolutions providing for the issue of shares of each particular series, the
Board of Directors is expressly authorized to fix:

                (i)     The annual dividend rate for such series, the dividend
        payment date and the date from which dividends shall be cumulative on
        all shares of such series issued prior to the record date for the first
        dividend;

                (ii)    The redemption price or prices for such series;

                (iii)   (A) the obligation, if any, of the Corporation to
        purchase and retire or redeem shares of such series from a sinking fund;
        (B) the provisions of such sinking fund; and (C) the redemption price or
        prices for shares of such series redeemed pursuant to sinking fund
        provisions, if shares so redeemed are to be redeemable at a price or
        prices other than the redemption price or prices for shares not so
        redeemed;

                (iv)    The rights, if any, of the holders of shares of such
        series to convert such shares into other classes of stock of the
        Corporation and the terms and conditions of such conversions;

                (v)     The rights and preferences of such series with respect
        to the voluntary or involuntary liquidation, dissolution or winding up
        of the affairs of the Corporation;

                (vi)    The voting rights, if any, of such series;

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                (vii)   The maximum number of shares of such series issuable;
        and

                (viii)  Any other preferences, limitations and relative rights
        which are not inconsistent with this Section 2.4.

        (b)     Relative Rights Between Series. In fixing the relative rights
and preferences of each series of Ten Dollar Preferred Stock, the Board of
Directors shall insure that all shares of this class will be identical except as
to the following relative rights and preferences, as to which there may be
variations between different series within this class:

                (i)     The rate of dividend.

                (ii)    The price at and the terms and conditions on which
        shares may be redeemed.

                (iii)   The amount payable upon shares in the event of
        involuntary or voluntary liquidation.

                (iv)    Sinking fund provisions for the redemption or purchase
        of shares.

                (v)     The terms and conditions on which shares may be
        converted, if the shares of any series are issued with the privilege of
        conversion.

        (c)     Preemptive Rights. No holder of shares of Ten Dollar Preferred
Stock as such shall have any preemptive rights to subscribe to shares,
obligations, warrants, or other securities of the Corporation of any class,
whether now or hereafter authorized.

        (d)     Statement of Classification of Shares. If and whenever, from
time to time, the Board of Directors shall determine to issue cumulative Ten
Dollar Preferred Stock of any series not then established, it shall, prior to
the issue of any shares of such new series, cause provisions respecting such
series to be set out in a Statement of Classification of Shares filed with the
Secretary of State of the State of North Carolina. The Board of Directors, in
any such Statement of Classification of Shares, may reclassify any of the
authorized but unissued shares of any particular series as shares, or additional
shares, of any other series or, unless otherwise provided in the Statement of
Classification of Shares establishing any particular series, increase the
maximum number of shares theretofore established for the particular series to
any greater number than authorized by the Statement of Classification of Shares
for that particular series.

        (e)     Shareholders' Consent. So long as any Ten Dollar Preferred Stock
shall be outstanding, the Corporation shall not (A) pay or declare any dividend
whatsoever, whether in cash, stock or otherwise, or make any distribution in
respect of the Common Stock of the Corporation, or purchase, redeem or otherwise
acquire any Common Stock, or set any funds apart for such purposes, unless all
dividends accrued and unpaid with respect to the Ten Dollar Preferred Stock
shall have been paid or funds for the payment thereof irrevocably set aside in
trust; or (B) without the affirmative vote of the holders of at least a majority
in interest of the Ten Dollar Preferred Stock then outstanding, amend, alter, or
repeal any of the provisions of the Ten Dollar Preferred Stock so as to affect
adversely the preferences, rights, or powers of the Ten Dollar Preferred Stock.

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        (f)     Relative Rights. So long as any part of the Eight Dollar
Preferred Stock is outstanding, such stock shall be superior to, and have
priority over the Ten Dollar Preferred Stock with respect to relative rights,
preferences and privileges.

        (g)     Designation and Number of Series A Preferred Stock. There shall
be hereby established a series of Ten Dollar Preferred Stock, par value $10 per
share, designated as "Series A Convertible Preferred Stock" (the "Series A
Preferred Stock"). The authorized number of shares of Series A Preferred Stock
shall be 15,287.

                (i)     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) Common Stock and any additional
        classes of common stock of the Corporation hereinafter created 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").

                (ii)    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 each holder of a 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 shares 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.

                (iii)   Liquidation Preference/Extraordinary Event Preference.

                        (A)     For the purposes of this Section 2.4(g)(iii), a
                Liquidation shall mean the voluntary or involuntary liquidation,
                dissolution or winding up of the Corporation. For purposes of
                this Section 2.4(g)(iii), an Extraordinary Event shall mean (1)
                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 (2)(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 "Series A Liquidation Amount") that
                shall be the sum of (1) the greater of

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                (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 "Series A Liquidation
                Preference") and (2) 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 (x) $1,000.00 per share (the "Extraordinary
                Event Preference") and (y) all declared and unpaid dividends
                thereon to the date fixed for the Extraordinary Event.

                        If the assets of the Corporation are not sufficient to
                pay in full the foregoing Series A 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 Series A Liquidation Amount and
                Extraordinary Event Amount payable to the holders of shares of
                Series A Preferred Stock in accordance with Section
                2.4(g)(iii)(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.

                (iv)    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 (1) $1,000.00 per share, and (2) all
                declared and unpaid dividends thereon to the date fixed for
                redemption (the "Series A 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

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                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 2.4(g)(iv)(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.

                        (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 (1)
                the date of redemption; (2) 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; (3) the Series
                A Redemption Price; (4) the place or places where certificates
                for such shares may be surrendered for payment of the Series A
                Redemption Price; and (5) 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 Ten
                Dollar 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 Series A 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 Series A Redemption Price upon surrender of their
                certificates) will terminate.

                (v)     Voting Rights; Election of Director.

                        (A)     The holders of Series A Preferred Stock, except
                as otherwise required under North Carolina law, or as set forth
                in subsections (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.

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                        (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 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.

                        (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
                2.4(g)(v)(C) shall be filled only by vote or written consent of
                the holders of a majority of the Series A Preferred Stock.

                (vi)    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 2.4(g)(vi), 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 2.4(g)(vi)(G), to a fraction, the numerator of which
                shall be the product of (1) the number of shares of Series A
                Preferred Stock being so converted and (2) the Extraordinary
                Event Preference and the denominator of which shall be the
                Series A 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 "Series
                A Conversion Price" shall be $8.00 per share, subject to
                adjustment as set forth in Section 2.4(g)(vi)(D). Such
                conversion right shall be exercised by the surrender of the
                shares of Series A Preferred Stock to be converted (the "Series
                A 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

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                (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 2.4(g)(vi)(K). All Series A
                Shares surrendered for conversion shall be delivered to the
                Corporation for cancellation and canceled by it and no Series A
                Shares shall be issued in lieu thereof.

                        (B)     As promptly as practicable after the surrender,
                as herein provided, of any Series A Shares for conversion
                pursuant to Section 2.4(g)(vi)(A), the Corporation shall deliver
                to or upon the written order of the holder of the Series A
                Shares so surrendered a certificate or certificates representing
                the number of fully paid and non-assessable shares of Common
                Stock into which such Series A Shares may be or have been
                converted in accordance with the provisions of this Section
                2.4(g)(vi). Subject to the following provisions of this Section
                2.4(g)(vi), such conversion shall be deemed to have been made
                immediately prior to the close of business on the date that such
                Series A 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 Series A 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 Series A 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 2.4(g)(iv)(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
                2.4(g)(vi)(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.

                                       10

<PAGE>

                        (D)     The Series A Conversion Price shall be subject
                to adjustment as follows:

                                (1)     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 2.4(g)(ii)) on the
                        outstanding shares of any of the Common Stock in Capital
                        Stock (which, for purposes of this Section
                        2.4(g)(vi)(D)(1) 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 2.4(g)(ii)) 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 Series A 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 2.4(g)(vi)(D)(1) shall become effective
                        retroactively (i) 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 (ii) 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.

                                (2)     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, of 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

                                       11

<PAGE>

                        price per share that is less than the higher of the then
                        Series A 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 2.4(g)(vi)(D) and (II) issuances which are
                        made to holders of shares of Series A Preferred Stock
                        pursuant to Section 2.4(g)(ii), then, and in each such
                        case, the Series A Conversion Price then in effect shall
                        be adjusted by dividing the Series A 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 (1) 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 (2) 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 2.4(g)(vi)(D)(2) 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

                                       12

<PAGE>

                        Section 2.4(g)(vi)(D)(2) 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 Series A
                        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.

                                (3)     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 2.4(g)(ii) and (b) dividends payable
                        in shares of Common Stock for which adjustment is made
                        under Section 2.4(g)(vi)(D)(1)) or rights or warrants to
                        subscribe for or purchase securities of the Corporation
                        (excluding those in respect of which adjustments in the
                        Series A Conversion Price is made pursuant to Section
                        2.4(g)(vi)(D)(1) or 2.4(g)(vi)(D)(2)), then, and in each
                        such case, the Series A Conversion Price then in effect
                        shall be adjusted by dividing the Series A 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

                                       13

<PAGE>

                        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 2.4(g)(vi)(D)(3) 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.

                                (4)     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 2.4(g)(iii) or Section 2.4(g)(vi)(D)(1) through
                        2.4(g)(vi)(D)(3), inclusive, then, the Series A
                        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).

                                (5)     Notwithstanding anything herein to the
                        contrary, no adjustment under this Section 2.4(g)(vi)(D)
                        need be made to the Series A Conversion Price unless
                        such adjustment would require an increase or decrease of
                        at least 1% of the Series A 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
                        Series A Conversion Price. Any adjustment to the Series
                        A 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 Series A
                Conversion Price then in effect shall be required by reason of
                the taking of such record.

                        (F)     Upon any increase or decrease in the Series A
                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 Series
                A Conversion Price then in effect following such adjustment.

                                       14

<PAGE>

                        (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
                2.4(g)(vi). 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 2.4(g)(vi) 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 2.4(g)(vi). The provisions of this
                Section 2.4(g)(vi) 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:

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

                                (2)     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;

                                (3)     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

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

                                       15

<PAGE>

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 2.4(g)(iii) 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 2.4(g)(vi) 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.

                                (1)     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.

                                (2)     Restricted Actions. Notwithstanding any
                        provision to the contrary contained in this Certificate,
                        the Corporation shall not be required to make any
                        payments to its stockholders, including without
                        limitation any Series A Liquidation Preference or any
                        Extraordinary Event Preference,

                                       16

<PAGE>

                        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.

                                   ARTICLE III

                                REGISTERED OFFICE

        The address of the registered office of the Corporation in the State of
North Carolina is 225 Hillsborough Street, Raleigh, Wake County, North Carolina
27603; and the name of its registered agent at such address is CT Corporation
System.

                                   ARTICLE IV

                             ACTION WITHOUT MEETING

        Any action required or permitted to be taken at a meeting of the
shareholders of the Corporation may be taken without a meeting if one or more
written consents, setting forth the action so taken, shall be signed by the
shareholders having not less than the minimum number of votes that would be
necessary to take the action at a meeting at which all shareholders entitled to
vote were present and voted. A shareholder's consent to action taken without
meeting may be in electronic form and delivered by electronic means. The
provisions of N.C.G.S. Section 55-7-4(d) shall not be applicable to the
Corporation.

                                    ARTICLE V

                             LIABILITY OF DIRECTORS

        No person who is serving or who has served as a director of the
Corporation shall be personally liable to the Corporation or any of its
shareholders for monetary damages for breach of duty as a director, except for
liability with respect to (i) acts or omissions that the director at the time of
such breach knew or believed were clearly in conflict with the best interests of
the Corporation, (ii) any transaction from which the director derived an
improper personal benefit, (iii) acts or omissions occurring prior to the
effective date of this article or (iv) acts or omissions with respect to which
the North Carolina Business Corporation Act does not permit the limitation of
liability. As used herein, the term "improper personal benefit" does not include
a director's reasonable compensation or other reasonable incidental benefit for
or on account of his service as a director, officer, employee, independent
contractor, attorney or consultant of the Corporation. No amendment or repeal of
this Article, nor the adoption of any provision to these Articles of

                                       17

<PAGE>

Incorporation inconsistent with this Article, shall eliminate or reduce the
protection granted herein with respect to any matter that occurred prior to such
amendment, repeal or adoption.

                                   ARTICLE VI

                               CERTAIN DEFINITIONS

        As used in these articles of incorporation 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 North Carolina 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).

        "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 2.1
hereof.

        "Corporation" shall have the meaning ascribed to it in Section 1.1
hereof.

        "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.

        "Eight Dollar Preferred Stock" shall have the meaning ascribed to it in
Section 2.1 hereof.

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

                                       18

<PAGE>

        "Extraordinary Event" shall have the meaning ascribed to it in Section
2.4(g)(iii)(A) hereof.

        "Extraordinary Event Amount" shall have the meaning ascribed to it in
Section 2.4(g)(iii)(B).

        "Extraordinary Event Preference" shall have the meaning ascribed to it
in Section 2.4(g)(iii)(B).

        "Issue Date" shall have the meaning ascribed to it in Section
2.4(g)(vi)(D)(2) hereof.

        "Junior Stock" shall have the meaning ascribed to it in Section
2.4(g)(i) hereof.

        "Liquidation" shall have the meaning ascribed to it in Section
2.4(g)(iii)(A) 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.

        "Merger" shall have the meaning ascribed to it in Section 2.4(g)(iii)(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
2.4(g)(vi)(H) hereof.

        "Relevant Date" shall have the meaning ascribed to it in Section
2.4(g)(vi)(D)(2) hereof.

        "Sale of Assets" shall have the meaning ascribed to it in Section
2.4(g)(iii)(A) hereof.

                                       19

<PAGE>

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

        "Series A Conversion Price" shall have the meaning ascribed to it in
Section 2.4(g)(vi) hereof.

        "Series A Liquidation Amount" shall have the meaning ascribed to it in
Section 2.4(g)(iii)(B) hereof.

        "Series A Liquidation Preference" shall have the meaning ascribed to it
in Section 2.4(g)(iii)(B) hereof.

        "Series A Preferred Stock" shall have the meaning ascribed to it in
Section 2.4(g) hereof.

        "Series A Redemption Price" shall have the meaning ascribed to it in
Section 2.4(g)(iv)(A) hereof.

        "Series A Shares" shall have the meaning ascribed to it in Section
2.4(g)(vi)(A) hereof.

        "Ten Dollar Preferred Stock" shall have the meaning ascribed to it in
Section 2.1 hereof.

                                       20