<PAGE>

                                                                     Exhibit 3.4

                   CERTIFICATE OF DESIGNATIONS, PREFERENCES
                   AND RELATIVE, PARTICIPATING, OPTIONAL AND
                       OTHER SPECIAL RIGHTS OF PREFERRED
                     STOCK AND QUALIFICATIONS, LIMITATIONS
                           AND RESTRICTIONS THEREOF

                                      OF

            6 3/4% SERIES F CUMULATIVE CONVERTIBLE PREFERRED STOCK

                                      OF

                          RHYTHMS NETCONECTIONS INC.
                                _______________

                        Pursuant to Section 151 of the
               General Corporation Law of the State of Delaware
                                _______________

     Rhythms NetConnections Inc. (the "Company"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, does hereby
certify that pursuant to authority conferred upon the board of directors (the
"Board of Directors") by its Certificate of Incorporation, and pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, said Board of Directors is authorized to issue Preferred Stock of the
Company in one or more series and has adopted the resolution set forth below on
February [__], 2000 (the "Resolution"):

     RESOLVED that, pursuant to the authority vested in the Board of Directors
by its Certificate of Incorporation, the Board of Directors does hereby
designate, create, authorize and provide for the issuance of 6 3/4% Series F
Cumulative Convertible Preferred Stock, par value $0.001 per share, with a
liquidation preference of $100.00 per share, consisting of 3,000,000 shares
having the designation, preferences, relative, participating, optional and other
special rights and the qualifications, limitations and restrictions thereof that
are set forth in the Certificate of Incorporation and in this Resolution as
follows:

     1.  Designation. There is hereby created out of the authorized and unissued
shares of Preferred Stock of the Company a series of Preferred Stock designated
as the "6 3/4% Series F Cumulative Convertible Preferred Stock" (the
"Convertible Preferred Stock"). The authorized number of shares constituting the
Convertible Preferred Stock shall be 3,000,000. The liquidation preference of
the Convertible Preferred Stock shall be $100.00 per share (the "Liquidation
Preference"). The date the Convertible Preferred Stock is first issued is
referred to as the "Issue Date".


<PAGE>

     2.   Rank. The Convertible Preferred Stock will, rank (i) junior in right
of payment to all existing and future debt obligations of the Company upon
liquidation, dissolution or winding up of the Company, including the Company's
13 1/2% Senior Discount Notes due 2008, the Company's 12 3/4% Senior Notes due
2009 and the Company's 14% Senior Notes due 2010 (collectively, the "Notes"),
(ii) junior in right of payment to each class or series of Capital Stock of the
Company, the terms of which expressly provide that such class or series of
Capital Stock will rank senior to the Convertible Preferred Stock as to
dividends and upon liquidation, dissolution or winding up of the Company
("Senior Capital Stock"); (iii) pari passu in right of payment with each class
of Capital Stock or series of Preferred Stock, established hereafter by the
Company's Board of Directors, the terms of which expressly provide that such
class or series will rank on a parity with the Convertible Preferred Stock as to
dividend rights and upon liquidation, dissolution or winding up of the Company
("Parity Capital Stock") and (iv) senior in right of payment as to dividend
rights and upon liquidation, dissolution or winding up of the Company to the
Common Stock and any Capital Stock of the Company that expressly provides that
it will rank junior to the Convertible Preferred Stock ("Junior Capital Stock").
The Company may not authorize, create (by way of reclassification or otherwise)
or issue any Senior Capital Stock or any obligation or security convertible or
exchangeable into, or evidencing a right to purchase, shares of any class or
series of Senior Capital Stock without the affirmative vote or consent of the
holders of at least 66-2/3% of the outstanding shares of Convertible Preferred
Stock.

     3.   Dividends. The Holders of shares of the Convertible Preferred Stock
will be entitled to receive, when, as and if dividends are declared by the Board
of Directors out of funds of the Company legally available therefor, cumulative
preferential dividends from the Issue Date of the Convertible Preferred Stock
accruing at the rate of $6 3/4 per share of Convertible Preferred Stock per
annum, or $1.6875 per share of Convertible Preferred Stock per quarter, payable
quarterly in arrears on March 3, June 3, September 3 and December 3 of each year
or, if any such date is not a Business Day, on the next succeeding business day
(each, a "Dividend Payment Date"), to the Holders of record as of the next
preceding February 17, May 17, August 17 and November 17 (each, a "Record
Date"). Accrued but unpaid dividends, if any, may be paid on such dates as
determined by the Board of Directors. Dividends payable on the Convertible
Preferred Stock will be computed on the basis of a 360-day year of twelve 30-day
months and will be deemed to accrue on a daily basis. Dividends on the
Convertible Preferred Stock will accrue from the Issue Date. Dividends on the
Convertible Preferred Stock will be paid in cash.  The Convertible Preferred
Stock will not be redeemable unless all dividends accrued through such
redemption date shall have been paid in full. Notwithstanding anything to the
contrary herein contained, the Company shall not be required to declare or pay a
dividend if another person (including, without limitation, any of its
subsidiaries) pays an amount to the Holders equal to the amount of such dividend
on behalf of the Company and, in such event, the dividend will be deemed paid
for all purposes.

     Dividends on the Convertible Preferred Stock will accrue whether or not the
Company has earnings or profits, whether or not there are funds legally
available for the

                                       2
<PAGE>

payment of such dividends and whether or not dividends are declared. Dividends
will accumulate to the extent they are not paid on the Dividend Payment Date for
the quarter to which they relate. Accumulated unpaid dividends will accrue and
cumulate dividends at a rate of 6 3/4% per annum. The Company will take all
reasonable actions required or permitted under Delaware law to permit the
payment of dividends on the Convertible Preferred Stock.

     No dividend whatsoever shall be declared or paid upon, or any sum set apart
for the payment of dividends upon, any outstanding share of the Convertible
Preferred Stock with respect to any dividend period unless all dividends for all
preceding dividend periods have been declared and paid upon, or declared and a
sufficient sum set apart for the payment of such dividend upon, all outstanding
shares of Convertible Preferred Stock. Unless full cumulative dividends on all
outstanding shares of Convertible Preferred Stock due for all past dividend
periods shall have been declared and paid, or declared and a sufficient sum for
the payment thereof set apart, then: (i) no dividend (other than, in the case of
Junior Capital Stock, a dividend payable solely in shares of Junior Capital
Stock or options, warrants or rights to purchase Junior Capital Stock, or in the
case of Parity Capital Stock, a dividend payable solely in shares of Junior
Capital Stock or Parity Capital Stock or options, warrants or rights to purchase
Junior Capital Stock or Parity Capital Stock) shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any shares of Parity
Capital Stock or Junior Capital Stock; (ii) no other distribution shall be
declared or made upon, or any sum set apart for the payment of any distribution
upon, any shares of Junior Capital Stock; (iii) no shares of Parity Capital
Stock or Junior Capital Stock or any warrants, rights, calls or options
exercisable for or convertible into any Parity Capital Stock or Junior Capital
Stock shall be purchased, redeemed or otherwise acquired or retired for value
(excluding an exchange for shares of other Parity Capital Stock or Junior
Capital Stock or a purchase, redemption or other acquisition from the proceeds
of a substantially concurrent sale of Parity Capital Stock or Junior Capital
Stock) by the Company or any of its subsidiaries; and (iv) no monies shall be
paid into or set apart or made available for a sinking or other like fund for
the purchase, redemption or other acquisition or retirement for value of any
shares of Parity Capital or Junior Capital Stock or any warrants, rights, calls
or options exercisable for or convertible into any Parity Capital Stock or
Junior Capital Stock by the Company or any of its subsidiaries. Holders of the
Convertible Preferred Stock shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of the full cumulative dividends
as herein described.

     No full dividends may be declared or paid or funds set apart for the
payment of dividends on any Parity Capital Stock for any period unless full
cumulative dividends shall have been or contemporaneously are declared and paid
(or are deemed declared and paid) in full or declared and, if payable in cash, a
sum in cash sufficient for such payment is set apart for such payment on the
Convertible Preferred Stock. If full dividends are not so paid, the Convertible
Preferred Stock shall share dividends pro rata with the Parity Capital Stock.
Dividends on account of arrears and dividends in connection with any optional
redemption may be declared and paid at any time, without reference to any

                                       3
<PAGE>

regular Dividend Payment Date, to holders of record on such date, not more than
45 days prior to the payment thereof, as may be fixed by the Board of Directors
of the Company.

     4.   Liquidation Rights. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company after payment in full of
the outstanding debt obligations of the Company and the Liquidation Preference
(and any accrued and unpaid dividends) on any Senior Capital Stock, each Holder
of shares of the Convertible Preferred Stock shall be entitled to payment out of
the assets of the Company available for distribution of the Liquidation
Preference per share of the Convertible Preferred Stock held by such Holder,
plus an amount equal to the accrued and unpaid dividends on the Convertible
Preferred Stock and Additional Dividends (as defined in the Registration Rights
Agreement) (if any) to the date fixed for liquidation, dissolution or winding up
before any distribution is made on any Junior Capital Stock, including, without
limitation, Common Stock of the Company. After payment in full of the
Liquidation Preference and an amount equal to the accrued and unpaid dividends
and Additional Dividends (if any), to which Holders of Convertible Preferred
Stock are entitled, such Holders will not be entitled to any further
participation in any distribution of assets of the Company. However, neither the
voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company nor the consolidation or merger of the Company with or
into one or more corporations will be deemed to be a voluntary or involuntary
liquidation, dissolution or winding up of the Company, unless such sale,
conveyance, exchange, transfer, consolidation or merger shall be in connection
with a liquidation, dissolution or winding up of the affairs of the Company.

     5.   Redemption. (a) Mandatory Redemption.  On March 3, 2012, the Company
shall redeem (subject to the legal availability of funds therefor) all
outstanding shares of Convertible Preferred Stock at a price in cash equal to
the Liquidation Preference thereof, together with an amount equal to accrued and
unpaid dividends on the Convertible Preferred Stock and Additional Dividends (if
any), to the date of redemption.

            (b) Provisional Redemption.  The Company may redeem the Convertible
Preferred Stock (a "Provisional Redemption"), in whole or in part, at any time
prior to March 6, 2003, upon notice as set forth in subsection (d), at a
redemption price equal to the Liquidation Preference thereof, together with an
amount equal to accrued and unpaid dividends on the Convertible Preferred Stock
and Additional Dividends (if any), to the date of redemption, if (i) the closing
price of the Common Stock shall have exceeded 150% of the Conversion Price then
in effect for at least 20 Trading Days in any consecutive 30-Trading Day period
ending on the Trading Day prior to the date of mailing of the notice of
redemption pursuant to subsection (d) (the "Notice Date") and (ii) the shelf
registration statement covering resales of the Convertible Preferred Stock and
the Common Stock issuable upon conversion of the Convertible Preferred Stock is
effective and available for use and is expected to remain effective and
available for use for the 30 days immediately following the Notice Date.

                                       4
<PAGE>

     Upon any such Provisional Redemption, the Company shall make an additional
payment in cash (the "Make-Whole Payment") with respect to the shares of
Convertible Preferred Stock called for redemption to holders on the Notice Date
in an amount equal to $13.79 per share of Convertible Preferred Stock, less the
amount of any dividends actually paid on such shares of Convertible Preferred
Stock prior to the Notice Date. The Company shall make the Make-Whole Payment on
all shares of Convertible Preferred Stock called for Provisional Redemption,
including any shares of Convertible Preferred Stock converted into Common Stock
pursuant to the terms hereof after the Notice Date and prior to the Provisional
Redemption Date.

            (c)  Optional Redemption.  Except as set forth in Section 5(b), the
Convertible Preferred Stock may not be redeemed at the option of the Company
prior to March 6, 2003. The Convertible Preferred Stock may be redeemed, in
whole or in part, at the option of the Company after March 6, 2003, at the
redemption prices specified below (expressed as percentages of the Liquidation
Preference thereof), in each case, together with an amount equal to accrued and
unpaid dividends on the Convertible Preferred Stock and Additional Dividends (if
any), to the date of redemption, upon not less than 30 nor more than 60 days'
prior written notice, during the 12-month period commencing on March 6 of each
of the years set forth below:

                  Period                              Redemption Price
                  ------                              ----------------
       2003.......................................       104.725%
       2004.......................................       104.050%
       2005.......................................       103.375%
       2006.......................................       102.700%
       2007.......................................       102.025%
       2008.......................................       101.350%
       2009.......................................       100.675%
       2010 and thereafter........................       100.000%

            (d)  General.  On and after any date fixed for redemption (the
"Redemption Date"), provided that the Company has made available at the office
of the Transfer Agent a sufficient amount of cash to effect the redemption,
dividends will cease to accrue on the Convertible Preferred Stock called for
redemption (except that, in the case of a Redemption Date after a dividend
payment Record Date and prior to the related Dividend Payment Date, holders of
Convertible Preferred Stock on the dividend payment Record Date will be entitled
on such Dividend Payment Date to receive the dividend payable on such shares),
such shares shall no longer be deemed to be outstanding and all rights of the
holders of such shares as holders of Convertible Preferred Stock shall cease
except the right to receive the cash deliverable upon such redemption, without
interest from the Redemption Date.

     In the event of a redemption of only a portion of the then outstanding
shares of Convertible Preferred Stock, the Company shall effect such redemption
on a pro rata basis, except that the Company may redeem all of the shares held
by Holders of fewer

                                       5
<PAGE>

than 100 shares (or all of the shares held by Holders who would hold less than
100 shares as a result of such redemption), as may be determined by the Company.

     With respect to a redemption pursuant hereto, the Company will send a
written notice of redemption by first class mail to each holder of record of
shares of Convertible Preferred Stock, not fewer than 30 days nor more than 60
days prior to the Redemption Date at its registered address (the "Redemption
Notice"); provided, however, that no failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the redemption
of any shares of Convertible Preferred Stock to be redeemed except as to the
holder or holders to whom the Company has failed to give said notice or except
as to the holder or holders whose notice was defective. The Redemption Notice
shall state:

     (i)     the redemption price;

     (ii)    whether all or less than all the outstanding shares of the
Convertible Preferred Stock are to be redeemed and the total number of shares of
the Convertible Preferred Stock being redeemed;

     (iii)   the Redemption Date;

     (iv)    that the holder is to surrender to the Company, in the manner, at
the place or places and at the price designated, his certificate or certificates
representing the shares of Convertible Preferred Stock to be redeemed; and

     (v)     that dividends on the shares of the Convertible Preferred Stock
to be redeemed shall cease to accumulate on such Redemption Date unless the
Company defaults in the payment of the redemption price.

     Each holder of Convertible Preferred Stock shall surrender the certificate
or certificates representing such shares of Convertible Preferred Stock to the
Company, duly endorsed (or otherwise in proper form for transfer, as determined
by the Company), in the manner and at the place designated in the Redemption
Notice, and on the Redemption Date the full redemption price for such shares
shall be payable in cash to the person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered certificate shall be
canceled and retired. In the event that less than all of the shares represented
by any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.

     6.      Voting Rights. Holders of record of shares of the Convertible
Preferred Stock will have no voting rights, except as required by law and as
provided in this Section 6 and in Sections 2, 9 and 13 hereof. Upon the
accumulation of accrued and unpaid dividends on the outstanding Convertible
Preferred Stock in an amount equal to six full quarterly dividends (whether or
not consecutive) (together with any event with a similar effect pursuant to the
terms of any other series of Preferred Stock upon which like

                                       6
<PAGE>

rights have been conferred, a "Voting Rights Triggering Event"), the number of
members of the Company's Board of Directors will be immediately and
automatically increased by two (unless previously increased pursuant to the
terms of any other series of Preferred Stock upon which like rights have been
conferred), and the Holders of a majority of the outstanding shares of
Convertible Preferred Stock, voting together as a class (pro rata, based on
Liquidation Preference) with the holders of any other series of Preferred Stock
upon which like rights have been conferred and are exercisable, will be entitled
to elect two members to the Board of Directors of the Company. Voting rights
arising as a result of a Voting Rights Triggering Event will continue until such
time as all dividends in arrears on the Convertible Preferred Stock are paid in
full.

     In the event such voting rights expire or are no longer exercisable because
dividends in arrears have been paid in full, the term of any directors elected
pursuant to the provisions of this paragraph 6 above shall terminate forthwith
and the number of directors constituting the Board of Directors shall be
immediately and automatically decreased by two (until the occurrence of any
subsequent Voting Rights Triggering Event). At any time after voting power to
elect directors shall have become vested and be continuing in the holders of
Convertible Preferred Stock (together with the holders of any other series of
Preferred Stock upon which like rights have been conferred and are exercisable)
pursuant to this paragraph 6, or if vacancies shall exist in the offices of
directors elected by such holders, a proper officer of the Company may, and upon
the written request of the holders of record of at least 25% of the shares of
Convertible Preferred Stock then outstanding or the holders of 25% of the shares
of any other series of Preferred Stock then outstanding upon which like rights
have been conferred and are exercisable addressed to the secretary of the
Company, shall, call a special meeting of the Holders of Convertible Preferred
Stock and the holders of such other series of Preferred Stock for the purpose of
electing the directors which such holders are entitled to elect pursuant to the
terms hereof; provided, however, that no such special meeting shall be called if
the next annual meeting of stockholders of the Company is to be held within 60
days after the voting power to elect directors shall have become vested (or such
vacancies arise, as the case may be), in which case such meeting shall be deemed
to have been called for such next annual meeting. If such meeting shall not be
called, pursuant to the provision of the immediately preceding sentence, by a
proper officer of the Company within 20 days after personal service to the
secretary of the Company at its principal executive offices, then the Holders of
record of at least 25% of the outstanding shares of Convertible Preferred Stock
or the holders of 25% of the shares of any other series of Preferred Stock upon
which like rights have been conferred and are exercisable may designate in
writing one of their members to call such meeting at the expense of the Company,
and such meeting may be called by the person so designated upon the notice
required for the annual meetings of stockholders of the Company and shall be
held at the place for holding the annual meetings of stockholders. Any Holder of
Convertible Preferred Stock or such other series of Preferred Stock so
designated shall have, and the Company shall provide, access to the lists of
Holders of Convertible Preferred Stock and the holders of such other series of
Preferred Stock for any such meeting of the holders thereof to be called
pursuant to the provisions hereof. If no special meeting of the Holders of
Convertible Preferred Stock and the

                                       7
<PAGE>

holders of such other series of Preferred Stock is called as provided in this
paragraph 6, then such meeting shall be deemed to have been called for the next
meeting of stockholders of the Company.

     At any meeting held for the purposes of electing directors at which the
Holders of Convertible Preferred Stock (together with the holders of any other
series of Preferred Stock upon which like rights have been conferred and are
exercisable) shall have the right, voting together as a separate class, to elect
directors as aforesaid, the presence in person or by proxy of the Holders of at
least a majority in voting power of the outstanding shares of Convertible
Preferred Stock (and such other series of Preferred Stock) shall be required to
constitute a quorum thereof.

     Any vacancy occurring in the office of a director elected by the Holders of
Convertible Preferred Stock (and such other series of Preferred Stock) may be
filled by the remaining director elected by the Holders of Convertible Preferred
Stock (and such other series of Preferred Stock) unless and until such vacancy
shall be filled by the Holders of Convertible Preferred Stock (and such other
series of Preferred Stock).

     Except as set forth above and otherwise required by applicable law, the
creation, authorization or issuance of any shares of any Junior Capital Stock,
Parity Capital Stock or Senior Capital Stock, or the increase or decrease in the
amount of authorized Capital Stock of any class, including Preferred Stock,
shall not require the affirmative vote or consent of Holders of Convertible
Preferred Stock and shall not be deemed to affect adversely the rights,
preferences, privileges or voting rights of shares of Convertible Preferred
Stock.

     In any case in which the Holders of Convertible Preferred Stock shall be
entitled to vote pursuant hereto or pursuant to Delaware law, each Holder of
Convertible Preferred Stock entitled to vote with respect to such matters shall
be entitled to one vote for each share of Convertible Preferred Stock held.

     Except as required by law, the Holders of the Convertible Preferred Stock
will not be entitled to vote on any merger or consolidation involving the
Company or a sale of all or substantially all the assets of the Company.

     7.   Change of Control

     (a)  In the event of a Change of Control, each Holder shall have the right
to require the Company to purchase all or a portion of such Holder's Convertible
Preferred Stock (the "Change of Control Offer") as of the date that is no
earlier than 30 days and no more than 60 days after the Change of Control Notice
Date (the "Change of Control Purchase Date") for a purchase price equal to 100%
of the Liquidation Preference together with accrued and unpaid dividends to but
not including the Change of Control Purchase Date. No funds shall be paid by the
Company pursuant to a Change of Control Offer prior to the Company's repurchase
of any securities ranking senior to the

                                       8
<PAGE>

Convertible Preferred Stock and requiring repurchase pursuant to the change of
control provisions governing such senior securities.

          Within 30 days after the occurrence of a Change of Control, the
Company shall mail to all Holders of record of the Convertible Preferred Stock a
written notice of the Change of Control, such date being the "Change of Control
Notice Date". The notice shall include the form of Change of Control Purchase
Notice (as defined) to be completed by the Holder and shall state:

        (i)     the date of such Change of Control and, briefly, the events
causing such Change of Control;

        (ii)    the date by which the Change of Control Purchase Notice pursuant
to this Section 7 must be given;

        (iii)   the Change of Control Purchase Date;

        (iv)    the Change of Control Purchase Price;

        (v)     briefly, the conversion rights of the Convertible Preferred
Stock;

        (vi)    the name and address of the Paying Agent and the Conversion
Agent;

        (vii)   the then current Conversion Rate;

        (viii)  that Convertible Preferred Stock as to which a Change of Control
Purchase Notice has been given may be converted into Common Stock only to the
extent that the Change of Control Purchase Notice has been withdrawn in
accordance with the terms of this Certificate of Designations;

        (ix)    the procedures that the Holder must follow to exercise rights
under this Section 7;

        (x)     the procedures for withdrawing a Change of Control Purchase
Notice, including a form of notice of withdrawal; and

        (xi)    that the Holder must satisfy the requirements set forth in the
Convertible Preferred Stock in order to convert the Convertible Preferred Stock.

     (b)   A Holder may exercise its rights specified in subsection (a) of this
Section 7 upon delivery of a written notice of the exercise of such rights (a
"Change of Control Purchase Notice") to the Paying Agent at any time prior to
the close of business on the Business Day next preceding the Change of Control
Purchase Date, stating:

        (i)   the name of the Holder;

                                       9
<PAGE>

        (ii)    the certificate numbers of the Convertible Preferred Stock that
the Holder will deliver to be purchased;

        (iii)   the number of shares of Convertible Preferred Stock that the
Holder will deliver to be purchased; and

        (iv)    that such Convertible Preferred Stock shall be purchased
pursuant to the terms and conditions specified in this Certificate of
Designations.

     The delivery of such Convertible Preferred Stock to the Paying Agent
(together with all necessary endorsements) at the office of the Paying Agent
shall be a condition to the receipt by the Holder of the Change of Control
Purchase Price therefor; provided, however, that such Change of Control Purchase
Price shall be so paid pursuant to this Section 7 only if the Convertible
Preferred Stock so delivered to the Paying Agent shall conform in all respects
to the description thereof set forth in the related Change of Control Purchase
Notice.

     Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Change of Control Purchase Notice shall have the right to
withdraw such Change of Control Purchase Notice at any time prior to the close
of business on the Business Day next preceding the Change of Control Purchase
Date by delivery of a written notice of withdrawal to the Paying Agent in
accordance with subsection (c) of this Section 7.

     The Paying Agent shall promptly notify the Company of the receipt by it of
any Change of Control Purchase Notice or written withdrawal thereof.

     (c)  Upon receipt by the Paying Agent of the Change of Control Purchase
Notice specified in subsection (b) of this Section 7, the Holder of the
Convertible Preferred Stock in respect of which such Change of Control Purchase
Notice was given shall (unless such Change of Control Purchase Notice is
withdrawn as specified below) thereafter be entitled to receive solely the
Change of Control Purchase Price with respect to such Convertible Preferred
Stock. Such Change of Control Purchase Price shall be    paid to such Holder
promptly following the later of (i) the Change of Control Purchase Date with
respect to such Convertible Preferred Stock (provided the conditions in
subsection (b) of this Section 7 have been satisfied) and (ii) the time of
delivery of such Convertible Preferred Stock to the Paying Agent by the Holder
thereof in the manner required by subsection (b) of this Section 7. Convertible
Preferred Stock in respect of      which a Change of Control Purchase Notice has
been given by the Holder thereof may not be converted into shares of Common
Stock on or after the date of the delivery of such Change of Control Purchase
Notice unless such Change of Control Purchase Notice has first been validly
withdrawn.

                                       10
<PAGE>

     A Change of Control Purchase Notice may be withdrawn by means of a written
notice of withdrawal delivered by the Holder to the office of the Paying Agent
at any time prior to the close of business on the Business Day immediately
preceding the Change of Control Purchase Date, specifying:

       (i)     the name of the Holder;

       (ii)    the certificate numbers of the Convertible Preferred Stock in
respect of which such notice of withdrawal is being submitted;

       (iii)   the number of shares of Convertible Preferred Stock with respect
to which such notice of withdrawal is being submitted; and

       (iv)    the number of shares, if any, of such Convertible Preferred Stock
that remains subject to the original Change of Control Purchase Notice and that
has been or will be delivered for purchase by the Company.

     (d)       At or before 11:00 a.m., New York City time, on the second
Business Day immediately following a Change of Control Purchase Date, the
Company shall deposit with the Paying Agent an amount of money sufficient to pay
the aggregate Change of Control Purchase Price of all of the shares of
Convertible Preferred Stock that are to be purchased as of such Change of
Control Purchase Date plus accrued and unpaid dividends thereon up to but not
including the Change of Control Purchase Date. The manner in which the deposit
required by this subsection (d) is made by the Company shall be at the option of
the Company, provided that such deposit shall be made in a manner such that the
Paying Agent shall have immediately available funds on the second Business Day
immediately following the Change of Control Purchase Date.

     If a Holder does not exercise the right to require the Company to purchase
such Holder's Convertible Preferred Stock, each share of such Convertible
Preferred Stock shall thereafter be convertible into the right to receive the
consideration receivable as a result of the Change of Control by a holder of the
number of shares of Common Stock into which such Convertible Preferred Stock was
convertible immediately prior to the Change of Control.

     (e)       A Change of Control shall be deemed to have occurred if any of
the following occurs: (a) any "person" or "group" (as such terms are used in
Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), excluding Permitted Holders, is or becomes the "beneficial
owner" (as defined in Rules 13d-3 or 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities that
such person has or acquires the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total voting power of all Voting Stock of
the Company (except that the person or group shall not be deemed the "beneficial
owner"
                                       11
<PAGE>

of shares tendered pursuant to a tender or exchange offer made by that
person or group or any of their Affiliates until the tendered shares are
accepted for purchase or exchange) or has, directly or indirectly, the right to
elect or designate a majority of the Board of Directors of the Company or (b)
the Company consolidates with, or merges with or into, another person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any person, or any person consolidates with,
or merges with or into, the Company, in any such event pursuant to a transaction
in which the outstanding Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of the Company is converted
into or exchanged for (1) Voting Stock (other than Disqualified Stock) of the
surviving or transferee corporation or its parent corporation and/or (2) cash,
securities and other property in any amount which could be paid by the Company
as a Restricted Payment under the Indentures governing the Notes (the
"Indentures"), (ii) the "beneficial owners" (as so defined) of the Voting Stock
of the Company immediately before such transaction own, directly or indirectly,
immediately after such transaction, at least a majority of the voting power of
all Voting Stock of the surviving or transferee corporation or its parent
corporation immediately after such transaction, as applicable, or (iii)
immediately after such transaction, no "person" or "group" (as such terms are
defined above), excluding the Permitted Holders, is the "beneficial owner" (as
defined above), directly or indirectly, of more than 50% of the Voting Stock of
such surviving or transferee corporation or its parent corporation, as
applicable, or has, directly or indirectly, the right to elect or designate a
majority of the board of directors of the surviving or transferee corporation or
its parent corporation, as applicable, or (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by the
Board or whose nomination for election by the stockholders of the Company was
approved by a vote of a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the Board then in office. The good faith determination by the Board,
based upon advice of outside counsel, of the beneficial ownership of securities
of the Company within the meaning of Rules 13d-3 or 13d-5 under the Exchange Act
shall be conclusive, absent contrary controlling precedent or contrary written
interpretation published by the Commission. No inference shall be created that
officers or employees of the Company are acting as a "person" or "group" (as
such terms are used in Sections 13(d) or 14(d) of the Exchange Act) with the
power to designate a majority of the members of the Board solely because such
officers or employees constitute a majority of the members of the Board.

     Notwithstanding the foregoing, a Change of Control will be deemed not to
have occurred if the last sale price of the Common Stock for any five Trading
Days immediately preceding the Change of Control is at least equal to 105% of
the Conversion Price in effect immediately preceding the Change of Control.

                                       12
<PAGE>

     8.   Conversion Rates. The Convertible Preferred Stock will be convertible
at the option of the Holder, into shares of Common Stock at any time, unless
previously redeemed or repurchased, at a conversion rate of 2.35 shares of
Common Stock per share of the Convertible Preferred Stock) (as adjusted pursuant
to the provisions hereof, the "Conversion Rate") (or equivalent to a conversion
price of $42.56 per share of Common Stock, the "Conversion Price") (subject to
the adjustments described below). The right to convert a share of the
Convertible Preferred Stock called for redemption or delivered for repurchase
will terminate at the close of business on the Redemption Date for such
Convertible Preferred Stock or at the time of the repurchase, as the case may
be. Convertible Preferred Stock for which a Holder has delivered a Change of
Control Purchase Notice exercising the option of such Holder to require the
Company to purchase such Convertible Preferred Stock may be converted only if
such notice is withdrawn by a written notice of withdrawal delivered by the
Holder to the Paying Agent prior to the close of business on the Business Day
prior to the Change of Control Purchase Date in accordance with Section 7.

     The right of conversion attaching to any share of Convertible Preferred
Stock may be exercised by the Holder thereof by delivering the share to be
converted to the office of the Transfer Agent, or any agency or office of the
Company maintained for that purpose, accompanied by a duly signed and completed
notice of conversion in form reasonably satisfactory to the Transfer Agent of
the Company, such as that which is set forth in Exhibit B hereto. The conversion
date will be the date on which the share and the duly signed and completed
notice of conversion are so delivered. As promptly as practicable on or after
the conversion date, the Company will issue and deliver to the Transfer Agent a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, with any fractional shares rounded up to full shares
or, at the Company's option, payment in cash in lieu of any fraction of a share,
based on the Closing Price of the Common Stock on the Trading Day preceding the
conversion date. Such certificate or certificates will be delivered by the
Transfer Agent to the appropriate Holder on a book-entry basis or by mailing
certificates evidencing the additional shares to the Holders at their respective
addresses set forth in the register of Holders maintained by the Transfer Agent.
All shares of Common Stock issuable upon conversion of the Convertible Preferred
Stock will be fully paid and nonassessable and will rank pari passu with the
other shares of Common Stock outstanding from time to time. Any shares of
Convertible Preferred Stock surrendered for conversion during the period from
the close of business on any Record Date to the opening of business on the next
succeeding Dividend Payment Date must be accompanied by payment of an amount
equal to the dividends payable on such Dividend Payment Date on the shares of
Convertible Preferred Stock being surrendered for conversion. No other payment
or adjustment for dividends, or for any dividends in respect of shares of Common
Stock, will be made upon conversion. Except as otherwise provided herein,
dividends accrued shall not be paid on Convertible Preferred Stock converted. If
any Holder surrenders shares of Convertible Preferred Stock for conversion
between a Record Date and the related Dividend Payment Date, then
notwithstanding such conversion, the dividend payable on such Dividend Payment
Date will be paid to the Holder on such Record Date. Holders of Common Stock
issued upon

                                       13
<PAGE>

conversion will not be entitled to receive any dividends payable to holders of
Common Stock as of any record time before the close of business on the
conversion date.

     The Conversion Rate shall be adjusted from time to time by the Company as
follows:

     (a)  In case the Company shall (i) pay a dividend in shares of Common
Stock to all holders of Common Stock, (ii) make a distribution in shares of
Common Stock to all holders of Common Stock, (iii) subdivide its outstanding
Common Stock into a greater number of shares or (iv) combine its outstanding
Common Stock into a smaller number of shares, the Conversion Rate in effect
immediately prior thereto shall be adjusted so that the Holder of any Security
thereafter surrendered for conversion shall be      entitled to receive that
number of shares of Common Stock which it would have owned had such Security
been converted immediately prior to the happening of such event. An adjustment
made pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend in shares or distribution and shall
become effective immediately after the effective date in the case of subdivision
or combination.

     (b)  In case the Company shall issue rights or warrants to all or
substantially all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock (or securities convertible into Common Stock) at
a price per share less than the current Market Price per share of Common Stock
at the record date for the determination of shareholders entitled to receive
such rights or warrants, the Conversion Rate in effect immediately prior thereto
shall be adjusted so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to such record date
by a fraction, of which the denominator shall be the number of shares of Common
Stock outstanding on such record date, plus the number of shares which the
aggregate offering price of the total number of shares of Common Stock so
offered (or the aggregate conversion price of the convertible securities so
offered) would purchase at such current Market Price, and of which the numerator
shall be the number of shares of Common  Stock outstanding on such record date
plus the number of additional shares     of Common Stock offered (or into which
the convertible securities so offered are convertible). Such adjustment shall be
made successively whenever any such rights or warrants are issued, and shall
become effective immediately after such record date. If at the end of the period
during which such rights or warrants are exercisable not all rights or warrants
shall have been exercised, the adjusted Conversion Rate shall be immediately
readjusted to what it would have been based upon the number of additional shares
of Common Stock actually issued (or the number of shares of Common Stock
issuable upon conversion of convertible securities actually issued).

     (c)  In case the Company shall distribute to all or substantially all
holders of its Common Stock any shares of Capital Stock of the Company (other
than Common Stock), evidences of indebtedness or other non-cash assets
(including securities of any company other than the Company), or shall
distribute to all or substantially all holders of its Common Stock rights or
warrants to subscribe for or purchase any of its securities

                                       14
<PAGE>

(excluding those referred to in subsection (b) above), then in each such case
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
date of such distribution by a fraction, of which the denominator shall be the
current Market Price per share of the Common Stock on the record date mentioned
below less the fair market value on such record date (as determined by the Board
of Directors, whose determination shall be conclusive evidence of such fair
market value) of the portion of the Capital Stock, evidences of indebtedness or
other non-cash assets so distributed or of such rights or warrants applicable to
one share of Common Stock (determined on the basis of the number of shares of
Common Stock outstanding on the record date), and of which the numerator shall
be the current Market Price per share of the Common Stock on such record date.
Such adjustment shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution.
Notwithstanding the foregoing, in the event that the Company shall distribute
rights or warrants (other than those referred to in subsection (b) above)
("Rights") pro rata to holders of Common Stock, the Company may, in lieu of
making any adjustment pursuant to this Section 8, make proper provision so that
each Holder of a share of Convertible Preferred Stock who converts such shares
of Convertible Preferred Stock (or any portion thereof) after the record date
for such distribution and prior to the expiration or redemption of the Rights
shall be entitled to receive upon such conversion, in addition to the shares of
Common Stock issuable upon such conversion (the "Conversion Shares"), a number
of Rights to be determined as follows: (i) if such conversion occurs on or prior
to the date for the distribution to the holders of Rights of separate
certificates evidencing such Rights (the "Distribution Date"), the same number
of Rights to which a holder of a number of shares of Common Stock equal to the
number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights and
(ii) if such conversion occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares of Common Stock into which the
number of shares of Convertible Preferred Stock so converted was convertible
immediately prior to the Distribution Date would have been entitled on the
Distribution Date in accordance with the terms and provisions of and applicable
to the Rights.

     (d)     In case the Company shall, by dividend or otherwise, at any time
distribute (a "Triggering Distribution") to all or substantially all holders of
its Common Stock cash in an aggregate amount that, together with the aggregate
amount of all cash distributions to all or substantially all holders of its
Common Stock made within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no Conversion Rate adjustment
pursuant to this Section 8 has been made, exceeds 10.0% of the product of the
current Market Price per share of Common Stock on the Business Day (the
"Determination Date") immediately preceding the day on which such Triggering
Distribution is declared by the Company multiplied by the number of shares of
Common Stock outstanding on such date (excluding shares held in the Treasury of
the Company), the Conversion Rate shall be increased so that the same shall
equal the rate determined by multiplying such Conversion Rate in effect
immediately prior to the Determination Date by a fraction, of which the
denominator shall be the current Market Price per share of the Common Stock on
the Determination Date less the amount of cash (plus the fair market value of
such other consideration) so distributed within such 12 months (including,
without limitation, the Triggering Distribution) applicable to one share of
Common Stock (determined on the basis of the number of shares of Common Stock
outstanding on the Determination Date) and the numerator shall be such current
Market Price per share of the

                                       15
<PAGE>

Common Stock on the Determination Date, such reduction to become effective
immediately prior to the opening of business on the day following the date on
which the Triggering Distribution is paid.

     (e)  In case any transaction or event (including, without limitation, any
merger, consolidation, sale of assets, tender or exchange offer,
reclassification, compulsory share exchange or liquidation) shall occur in which
all or substantially all outstanding Common Stock is converted into or exchanged
for stock, other securities, cash or assets (each, a "Fundamental Change"), the
holder of each share of Convertible Preferred Stock outstanding immediately
prior to the occurrence of such Fundamental Change shall have the right upon any
subsequent conversion to receive (but only out of legally available funds, to
the extent required by applicable law) the kind and amount of stock, other
securities, cash and assets that such holder would have received if such share
had been converted immediately prior thereto.

     (f)  In any case in which this Section 8 shall require that an adjustment
be made following a record date or a Determination Date, as the case may be,
established for purposes of this Section 8, the Company may elect to defer (but
only until five Business Days following the filing by the Company with the
Transfer Agent of the certificate described in subsection (i) of this Section 8)
issuing to the Holder of any Security converted after such record date or
Determination Date the shares of Common Stock and other Capital Stock of the
Company issuable upon such conversion over and above the shares of Common Stock
and other Capital Stock of the Company issuable upon such conversion only on the
basis of the Conversion Rate prior to adjustment; and, in lieu of the shares the
issuance of which is so deferred, the Company shall issue or cause its transfer
agents to issue due bills or other appropriate evidence prepared by the Company
of the right to receive such shares. If any distribution in respect of which an
adjustment to the Conversion Rate is required to be made as of the record date,
effective date or Determination Date therefor is not thereafter made or paid by
the Company for any reason, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed or such effective date or Determination Date had not occurred.

     (g) (i)  No adjustment in the Conversion Price or the corresponding
Conversion Rate shall be required unless such adjustment would require an
increase or decrease of at least 1% in such rate; provided, however, that any
adjustments which by reason of this paragraph are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this paragraph shall be made by the Company and shall be made
to the nearest cent or to the nearest one-hundredth of a share,

                                       16
<PAGE>

as the case may be. No adjustment need be made for a change in the par value or
no par value of the Common Stock.

     (ii)    No adjustment need be made for a transaction referred to in this
Section 8 if all holders of all of the Company's securities are entitled to
participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Stock participate in the transaction. The Company
shall give notice to the Transfer Agent of any such determination.

     (iii)   No adjustment need to be made for rights to purchase Common Stock
or issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends of interest. No adjustment need be made for a change in the par value
or a change to no par value of the Common Stock. To the extent that the
Convertible Preferred Stock becomes convertible into the right to receive cash,
no adjustment need be made thereafter as to the cash. Interest will not accrue
on the cash.

     (h)     The Company shall be entitled to make such reductions in the
Conversion Rate, in additional to those required by Section 8, as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivisions of shares, distributions of rights to purchase stock or securities
or distributions of securities convertible into or exchangeable for stock
hereafter made by the Company to its shareholders shall not be taxable.

     (i)     The Company may from time to time reduce the Conversion Rate by an
amount for any period of time if the period is at least 20 days or such longer
period as required by law and if the reduction is irrevocable during the period;
provided, however, that in no event may the Conversion Rate be reduced such that
the Conversion Price is less than the par value of a share of Common Stock.

     (j)     Whenever the Conversion Rate is adjusted, the Company shall
promptly file with the Transfer Agent an Officers' Certificate briefly stating
the facts requiring the adjustment and the manner of computing it.

     (k)  The Company shall provide to the Holders reasonable notice of any
event that would result in an adjustment to the Conversion Rate so as to permit
the Holders to effect a conversion of Convertible Preferred Stock into shares of
Common Stock prior to the occurrence of such event.

    9.     Certain Covenants.

    (a)    Payments for Consent

     Neither the Company nor any of its subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
dividend or other distribution, fee

                                       17
<PAGE>

or otherwise, to any Holder of shares of the Convertible Preferred Stock for or
as an inducement to any consent, waiver or amendment of any of the terms or
provisions of the Certificate of Designations or the Convertible Preferred Stock
unless such consideration is offered to be paid and is paid to all Holders of
the Convertible Preferred Stock that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.

     (b)   Reports

     Whether or not required by the rules and regulations of the Commission, so
long as any shares of the Convertible Preferred Stock are outstanding, the
Company shall furnish to the Holders of the Convertible Preferred Stock (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
were required to file such Forms, including "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all information that would be required to be
contained in a current report on Form 8-K if the Company were required to file
such reports. In the event the Company has filed any such report with the
Commission, it shall not be obligated to separately furnish the report to any
Holder unless and until such Holder requests a copy of the report. In addition,
whether or not required by the rules and regulations of the Commission, the
Company shall file a copy of all such information and reports with the
Commission for public availability (unless the Commission will not accept such a
filing) and make such information available to securities analysts and
prospective investors upon request.

     10.   Reissuance of Convertible Preferred Stock. Shares of Convertible
Preferred Stock redeemed for or converted into Common Stock or that have been
reacquired in any manner shall not be reissued as shares of Convertible
Preferred Stock and shall (upon compliance with any applicable provisions of the
laws of Delaware) have the status of authorized and unissued shares of Preferred
Stock undesignated as to series and may be redesignated and reissued as part of
any series of Preferred Stock; provided, however, that so long as any shares of
Convertible Preferred Stock are outstanding, any issuance of such shares must be
in compliance with the terms hereof.

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

     12.   Additional Rights of Holders. In addition to the rights provided to
Holders under this Certificate of Designation, Holders shall have the rights set
forth in the Registration Rights Agreement.

     13.   Amendment, Supplement and Waiver. The Company may amend this
Certificate of Designation with the affirmative vote or consent of the holders
of a

                                       18
<PAGE>

majority of the shares of Convertible Preferred Stock then outstanding
(including votes or consents obtained in connection with a tender offer or
exchange offer for the Convertible Preferred Stock) and, except as otherwise
provided by applicable law, any past default or failure to comply with any
provision of this Certificate of Designation may also be waived with the consent
of such holders. Notwithstanding the foregoing, however, without the consent of
each Holder affected, an amendment or waiver may not (with respect to any shares
of the Convertible Preferred Stock held by a non-consenting Holder): (i) alter
the voting rights with respect to the Convertible Preferred Stock or reduce the
number of shares of the Convertible Preferred Stock whose Holders must consent
to an amendment, supplement or waiver, (ii) reduce the Liquidation Preference of
any share of the Convertible Preferred Stock or adversely alter the provisions
with respect to the redemption of the Convertible Preferred Stock, (iii) reduce
the rate of or change the time for payment of dividends on any share of the
Convertible Preferred Stock, (iv) waive a default in the payment of dividends or
Additional Dividends (if any) on the Convertible Preferred Stock, (v) make any
share of the Convertible Preferred Stock payable in money other than United
States dollars, (vi) make any change in the provisions of the Certificate of
Designation relating to waivers of the rights of Holders of the Convertible
Preferred Stock to receive the Liquidation Preference, dividends or Additional
Dividends (if any) on the Convertible Preferred Stock or (vii) make any change
in the foregoing amendment and waiver provisions.

     Notwithstanding the foregoing, without the consent of any Holder of the
Convertible Preferred Stock, the Company may (to the extent permitted by, and
subject to the requirements of, Delaware law) amend or supplement this
Certificate of Designation to cure any ambiguity, defect or inconsistency, to
provide for uncertificated shares of the Convertible Preferred Stock in addition
to or in place of certificated shares of the Convertible Preferred Stock, to
make any change that would provide any additional rights or benefits to the
Holders of the Convertible Preferred Stock or to make any change that the Board
of Directors determines, in good faith, is not materially adverse to Holders of
the Convertible Preferred Stock.

     14.   Transfer and Exchange. When Convertible Preferred Stock is presented
to the Transfer Agent with a request to register the transfer of such
Convertible Preferred Stock or to exchange such Convertible Preferred Stock for
an equal number of shares of Convertible Preferred Stock of other authorized
denominations, the Transfer Agent shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met and such transfer or exchange is in compliance with applicable laws or
regulations.

     15.   Certain Definitions. As used in this Certificate of Designation, the
following terms shall have the following meanings (and (1) terms defined in the
singular have comparable meanings when used in the plural and vice versa, (2)
"including" means including without limitation, (3) "or" is not exclusive and
(4) an accounting term not otherwise defined has the meaning assigned to it in
accordance with United States generally accepted accounting principles as in
effect on the Issue Date and all accounting

                                       19
<PAGE>

calculations will be determined in accordance with such principles), unless the
content otherwise requires:

     "Additional Dividends" means, with respect to any share of Convertible
Preferred Stock, the additional amounts payable pursuant to Section 4 hereof.

     "Affiliate" of any specified Person means (i) any other Person which,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, the specified Person, (ii) any other Person that
owns, directly or indirectly, 10% or more of the specified Person's Voting Stock
or (iii) any executive officer or director of the specified Person.

     "Board of Directors" mean the Board of Directors of the Company or any
committee thereof duty authorized to act on behalf of the Board.

     "Business Day" means each day which is not a legal holiday.

     "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting and/or non-voting) of, such Person's capital stock, including
Preferred Stock, and any and all rights (other than any evidence of
indebtedness), warrants or options exchangeable for or convertible into such
capital stock.

     "Closing Price" means on any day the reported last sale price on such day,
or in case no sale takes place on such day, the average of the reported closing
bid and ask prices on the principal national securities exchange (which shall
include the Nasdaq National Market) on which such stock is listed or admitted to
trading (and if the Common Stock is listed or admitted to trading on more than
one U.S. national or non-U.S. securities exchange, the Company shall determine,
in its reasonable discretion, the principal securities exchange on which such
Common Stock is listed or admitted to trading), or if not listed or admitted to
trading on any securities exchange, the average of the closing bid and ask
prices as furnished by any independent registered broker-dealer firm, selected
by the Company for that purpose, in each case adjusted for any stock split
during the relevant period.

     "Commission" means the Securities and Exchange Commission.

     "Default" means any event which is, or after notice or passage of time or
both would be, a Voting Rights Triggering Event.

     "Disqualified Stock" means, with respect to any Person, any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or becomes mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or becomes exchangeable for indebtedness at the option
of the holder thereof, or becomes redeemable at the option
                                       20
<PAGE>

of the holder thereof, in whole or in part, on or prior to the final maturity
date of any of the Notes; provided that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
final maturity date of any of the Notes will not constitute Disqualified Stock
so long as the "asset sale" or "change of control" provisions applicable to such
Capital Stock are no more favorable to the holders thereof than those applicable
to the Notes and such Capital Stock specifically provides that such Person will
not repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
the Indentures.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Holders" means the registered holders from time to time of the
Convertible Preferred Stock.

     "Market Price", as of any date, means the average of the daily Closing
Price for the five consecutive trading days ending on such date.

     "Officers' Certificate" means a certificate signed by two officers of the
Company.

     "Permitted Holders" means Brentwood Venture Capital, Enterprise Partners,
Kleiner Perkins Caulfield & Byers, The Sprout Group and Catherine M. Hapka, and
their respective Affiliates.

     "Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

     "Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference stock, and including, without limitation, all
classes and series of preferred or preference stock of such Person.

     "Registration Rights Agreement" means the Registration Rights Agreement
among the Company and Merrill Lynch, Pierce, Fenner and Smith Incorporated, and
Salomon Smith Barney Inc. with respect to the Convertible Preferred Stock.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Shelf Registration Statement" means a shelf registration statement filed
with the Commission to cover resales of Transfer Restricted Securities by
holders thereof, as required by the Registration Rights Agreement.

                                       21
<PAGE>

          "Trading Day" means, in respect of any securities exchange or
securities market, each Monday, Tuesday, Wednesday, Thursday and Friday, other
than any day on which securities are not traded on the applicable securities
exchange or in the applicable securities market.

          "Transfer Agent" means the transfer agent for the Convertible
Preferred Stock appointed by the Company, which initially shall be American
Securities Transfer & Trust, Inc.

          "Transfer Restricted Securities" means each share of Convertible
Preferred Stock (or the shares of Common Stock into which such share of
Convertible Preferred Stock is convertible) until (i) the date on which such
security has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement or (ii) the date on which
such security is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act
(or any successor rule thereof) or would be saleable pursuant to Rule 144(k)
under the Securities Act had it not been held by, or had it never been held by,
an affiliate of the Company.

          "Voting Stock" means, with respect to any Person, the Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors or other members of the governing body of such Person.

     IN WITNESS WHEREOF, said Rhythms NetConnections Inc., has caused this
Certificate of Designation to be signed by Catherine M. Hapka, its Chairman and
Chief Executive Officer, this __th day of March, 2000.

                                            RHYTHMS NETCONNECTIONS INC.

                                            By:   ______________________________
                                                  Name:   Catherine M. Hapka
                                                  Title:  Chairman and Chief
                                                          Executive Officer

                                       22