<PAGE>   1
FILING FEE $50.00                                               Exhibit 3.1.1(a)

                                                         ID NUMBER:        36896
[GRAPHIC OMITTED]

                STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
                        Office of the Secretary of State
                              Corporations Division
                              100 North Main Street
                       Providence, Rhode Island 02903-1335

                              BUSINESS CORPORATION

                                  ------------

                          ARTICLES OF AMENDMENT TO THE
                            ARTICLES OF INCORPORATION
                       (TO BE FILED IN DUPLICATE ORIGINAL)

Pursuant to the provisions of Section 7-1.1-56 of the General Laws, 1956, as
amended, the undersigned corporation adopts the following Articles of Amendment
to its Articles of Incorporation:

1.  The name of the corporation is        AAi.FosterGrant, Inc.
                                          --------------------------------------

2.  The shareholders of the corporation  (or, where no shares have been issued,
    the board of directors of the corporation)
--------------------------------------------------------------------------------
    on March 31, 2000                , in the manner prescribed by Chapter 7-1.1
    of the General Laws, 1956, as amended,
--------------------------------------------------------------------------------
    adopted the following amendment(s) to the Articles of Incorporation:

                              [INSERT AMENDMENT(S)]
      (If additional space is required, please list on separate attachment)
    Article Fourth, as amended, is hereby deleted in its Entirety and the
   following substituted therefor:
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
See Exhibit A.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

3.  The number of shares of the corporation outstanding at the time of such
    adoption was 653,676; and
                ---------
    the number of shares entitled to vote thereon was  653,676.
                                                      --------------------------

4.  The designation and number of outstanding shares of each class entitled to
    vote thereon as a class were as follows: (If inapplicable, insert "none.")

               Class                                    Number of Shares
    ----------------------------------------------------------------------------
    COMMON STOCK                                                608,000
    ----------------------------------------------------------------------------

    PREFERRED STOCK                                             45,676
    ----------------------------------------------------------------------------

    ----------------------------------------------------------------------------

Form No. 101
Revised:  01/99

<PAGE>   2
5.  The number of shares voted for such amendment was  632,510; and the number
    of shares voted against such amendment was 21,166.

6.  The number of shares of each class entitled to vote thereon as a class voted
    for and against such amendment, respectively, was:
    (If inapplicable, insert "none.")

                                               Number of Shares Voted
                 Class                    For                   Against
                 -----                    ---            ----------------------
    Common                               600,400                 7,600
    -----------------------------    --------------     ------------------------
    Preferred                             32,110                13,566
    -----------------------------    --------------     ------------------------

    -----------------------------    --------------     ------------------------

7. The manner, if not set forth in such amendment, in which any exchange,
   reclassification, or cancellation of issued shares provided for in the
   amendment shall be effected, is as follows: (If no change, so state)
   The manner is set forth in the amendment.
   -----------------------------------------------------------------------------

   -----------------------------------------------------------------------------

   -----------------------------------------------------------------------------

   -----------------------------------------------------------------------------

8. The manner in which such amendment effects a change in the amount of stated
   capital, and the amount (expressed in dollars) of stated capital as changed
    by such amendment, are as follows:  (If no change, so state)

    No change.
    ----------------------------------------------------------------------------

    ----------------------------------------------------------------------------

    ----------------------------------------------------------------------------

    ----------------------------------------------------------------------------

    ----------------------------------------------------------------------------

9.  As required by Section 7-1.1-57 of the General Laws, the corporation has
    paid all fees and franchise taxes.

10. Date when amendment is to become effective  upon filing
                                               ---------------------------------
   (not prior to, nor more than 30 days after, the filing of these
    articles of amendment)



Date:  June 8, 2000                   AAi.FosterGrant, Inc.
                                      ------------------------------------------
                                                Print Corporate Name


                                      By /s/ John R. Ranelli
                                        ----------------------------------------
                                          X President or Vice President
                                          (check one)

                                                        AND

                                      By /s/ Stephen J. Carlotti
                                         ---------------------------------------
                                         X Secretary or Assistant Secretary
                                         (check one)

STATE OF           Rhode Island
         -------------------------
COUNTY OF          Providence
         -------------------------


     In Smithfield , on this 8th day of June , 2000 personally appeared before
me John Ranelli who, being by me first duly sworn, declared that he/she is the
CEO/President of the corporation and that he/she signed the foregoing document
as such officer of the corporation, and that the statements herein contained are
true.


                                            /s/ Dawn E. Degnan
                                             -----------------------------------
                                            Notary Public
                                            My Commission Expires: 2/17/2002
                                                                  --------------
<PAGE>   3


                                    EXHIBIT A

                            TO ARTICLES OF AMENDMENT
                                     TO THE
                            ARTICLES OF INCORPORATION


         ARTICLE FOURTH, AS AMENDED, IS HEREBY DELETED IN ITS ENTIRETY AND THE
FOLLOWING SUBSTITUTED THEREFOR:

         "FOURTH: The aggregate number of shares which the Corporation has the
authority to issue is 5,000,000 shares, consisting of (i) 4,800,000 shares of
Common Stock with a par value of one cent ($.01) per share (the "COMMON STOCK"),
and (ii) 200,000 shares of Preferred Stock with a par value of one cent ($.01)
per share (the "PREFERRED STOCK").

         1.       DESIGNATION AND AMOUNT.  The Preferred Stock shall be divided
into one or more series.

                  1.1. SERIES A PREFERRED STOCK. The designation of the first
series of the Preferred Stock shall be Series A Redeemable Convertible Preferred
Stock (the "SERIES A PREFERRED STOCK"). The number of shares of Series A
Preferred Stock shall initially be 34,200 subject to increase (but only as to
shares of Preferred Stock authorized by the Articles of Incorporation, as
amended, with respect to which the powers, designations, preferences and rights
shall not then have been previously designated) or decrease (but not below the
number of shares thereof then outstanding) from time to time by action of the
Board of Directors.

                  1.2.     SERIES B PREFERRED STOCK.  The designation of the
second series of the Preferred Stock shall be Senior Series B Preferred Stock
(the "SERIES B PREFERRED STOCK").  The number of shares of Series B Preferred
Stock shall be 75,000.

                  1.3. ISSUANCE. The Series A Preferred Stock has been issued
pursuant to a Securities Purchase Agreement by and among the Corporation, Weston
Presidio Capital II, L.P., and certain other investors (as from time to time in
effect, the "PURCHASE AGREEMENT"). The Series B Preferred Stock will be issued
in consideration of the guaranty to be provided to Bank of America, N.A. (f/k/a
NationsBank, N.A.) ("the Bank") by certain of the holders of Series A Preferred
Stock (the "GUARANTORS") to guarantee the Corporation's obligations up to an
amount of $7,500,000 (the "GUARANTY") under the terms of that certain Second
Amended and Restated Financing and Security Agreement by and between the Bank
and the Corporation dated July 21, 1998, as heretofore and hereafter amended
(the "LOAN AGREEMENT"). A copy of the Purchase Agreement will be provided to any
registered holder of shares of capital stock of the Corporation following
written request directed to the Secretary of the Corporation at its registered
address.

                  1.4. RELATIVE POWERS, PREFERENCES AND RIGHTS. The respective
relative powers, preferences and rights, and relative participating, optional or
other special rights, and the qualifications, limitations or restrictions
thereof, granted to or imposed on the Series A Preferred Stock and the Series B
Preferred Stock are set forth below.

        2. DEFINITIONS. Certain capitalized terms are used in these Articles of
Amendment as specifically defined below in this Section 2. Except as the context
otherwise explicitly requires, (a) the capitalized term "Section" refers to
sections of these Articles of Amendment, (b) references to a particular Section
include all subsections thereof, (c) the word "including" shall be construed as
"including without limitation", (d) accounting terms not otherwise defined
herein have the meaning provided under generally accepted accounting principles,
(e) references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, regulation or rules, in each
case as from time to time in effect


<PAGE>   4

and (f) references to a particular Person include such Person's successors
and assigns to the extent not prohibited by these Articles of Amendment, the
Purchase Agreement and the Addendum. References to "the date hereof" mean the
effective date of these Articles of Amendment.

                  2.1.     "ACCEPTED SHARES" is defined in Section 11.2.

                  2.2.     "ADDITIONAL SHARES OF COMMON STOCK" is defined in
Section 9.4.1(d).

                  2.3. "BY-LAWS" means all written rules, regulations,
procedures and by-laws and all other similar documents, relating to the
management, governance or internal regulation of a Person other than an
individual, or interpretive of the Charter of such Person, each as from time to
time amended or modified.

                  2.4.     "COMMON STOCK" means the common stock $0.01 par
value, of the Corporation.


                  2.5.     "CORPORATION" is defined in the Preamble.


                  2.6.     "CONVERSION PRICE" is defined in Section 9.1.1.

                  2.7.     "CONVERTIBLE SECURITIES" is defined in Section
9.4.1(c).

                  2.8.     "FUTURE SHARES" is defined in Section 11.1.

                  2.9.     "FUTURE SHARES EXERCISE PERIOD" is defined in
Section 11.1.

                  2.10.    "GUARANTY" Is defined in Section 1.3.

                  2.11.    "GUARANTORS" is defined in Section 1.3.

                  2.12. "INDEBTEDNESS" means (a) all debt for borrowed money and
similar monetary obligations evidenced by bonds, notes, debentures, capitalized
lease obligations, deferred purchase price of property (other than ordinary
trade payables) or otherwise, whether direct or indirect; and (b) all
liabilities secured by any liens existing on property owned or acquired, whether
or not the liability secured thereby shall have been assumed.

                  2.13.    "INVESTOR AGREEMENT" is defined in the Purchase
Agreement.

                  2.14.    "LOAN AGREEMENT" is defined in Section 1.3.

                  2.15.    "NOTICE OF PURCHASE" is defined in Section 11.2.

                  2.16.    "OFFEREE" is defined in Section 11.1.

                  2.17.    "OPTIONS" is defined in Section 9.4.1(a).

                  2.18.    "ORGANIC CHANGE" is defined in Section 6.2.

                  2.19.    "ORIGINAL ISSUE DATE" is defined in Section 9.4.1(b).

                  2.20. "PERSON" means an individual, partnership, corporation,
company, association, trust, joint venture, unincorporated organization,
business trust, limited liability company and any governmental department or
agency or political subdivision.

<PAGE>   5


                  2.21.    "PREFERRED DIRECTOR" is defined in Section 5.3.

                  2.22.    "PREFERRED STOCK" is defined in Section 1.

                  2.23.    "PROPORTIONATE PERCENTAGE" is defined in
Section 11.1.

                  2.24.    "PROPOSAL" is defined in Section 11.1.

                  2.25.    "PUBLIC OFFERING" is defined in Section 4.2.

                  2.26.    "PURCHASE AGREEMENT" is defined in Section 1.

                  2.27.    "QUALIFIED PUBLIC OFFERING" is defined in
 Section 9.2.

                  2.28.    "RELATED AGREEMENTS" is defined in the Purchase
Agreement.

                  2.29.    "REMEDY EVENT" is defined in Section 8.

                  2.30.    "REMEDY NOTICE" is defined in Section 5.2.2.

                  2.31.    "SERIES A CALCULATION DATE" is defined in
Section 4.2.

                  2.32.    "SERIES A PREFERENTIAL AMOUNT" is defined in
Section 4.1.2.

                  2.33.    "SERIES B PREFERENTIAL AMOUNT" is defined in
Section 4.1.1.

                  2.34.    "SERIES A PREFERRED STOCK" is defined in Section 1.1.

                  2.35.    "SERIES B PREFERRED STOCK" is defined in Section 1.2.

                  2.36.    "SERIES A REQUIRED HOLDERS" means the holders of
two-thirds of the outstanding Series A Preferred Stock.

                  2.37.    "SERIES B REQUIRED HOLDERS" means the holders of
two-thirds of the outstanding Series B Preferred Stock.

                  2.38.    "WARRANTS" is defined in Section 6.3.

         3.       DIVIDENDS.

                  3.1.     SERIES B PREFERRED STOCK.  The holders of Series B
Preferred Stock shall not be entitled to receive dividends.

                  3.2. SERIES A PREFERRED STOCK. No dividends of cash or other
property (other than additional shares of Common Stock) shall be paid on the
Common Stock unless the shares of Series A Preferred Stock receive the same
dividends that such shares would have received had they been converted into
Common Stock immediately prior to the record date for such dividend.

         4.       LIQUIDATION PREFERENCE.

<PAGE>   6

                  4.1. LIQUIDATION; DISSOLUTION; MERGER. In the event of (a) any
liquidation, dissolution or winding up of the Corporation, either voluntary or
involuntary, or (b) unless agreed otherwise in writing by the Series B Required
Holders and the Series A Required Holders, a merger or consolidation of the
Corporation, distributions to the stockholders of the Corporation shall be made
in the following manner.

                           4.1.1.  HOLDERS OF SERIES B PREFERRED STOCK. The
holders of Series B Preferred Stock shall first be entitled to receive, prior
and in preference to any distribution of any of the assets of the Corporation to
the holders of any other series of Preferred Stock, Common Stock or other
capital stock of the Corporation by reason of their ownership of such stock, an
amount per share equal to the sum of six dollars and sixty-seven cents ($6.67)
MULTIPLIED BY the number of six (6) months periods, and/or any fractional period
thereof, from the date of issuance of the Guaranty to the last date on which the
Guaranty was outstanding (such sum being referred to as the "SERIES B
PREFERENTIAL AMOUNT"). If the assets and funds of the Corporation shall be
insufficient to permit the payment of the full Series B Preferential Amount to
the holders of Series B Preferred Stock, then the entire assets of the
Corporation legally available for distribution shall be distributed ratably
among the holders of Series B Preferred Stock in accordance with the aggregate
liquidation preference of the shares of Series B Preferred Stock held by each of
them.

                           4.1.2.  HOLDERS OF SERIES A PREFERRED STOCK. After
payment has been made to the holders of Series B Preferred Stock of the full
amounts to which they are entitled, the holders of Series A Preferred Stock
shall next be entitled to receive, prior and in preference to any distribution
of any of the assets of the Corporation to the holders of any other series of
Preferred Stock, other than Series B Preferred Stock, Common Stock or other
capital stock of the Corporation by reason of their ownership of such stock, an
amount per share equal to the greater of (1) the sum of (a) $526.32 plus (b) an
amount in the form of a dividend which would equal a 10% rate of return
compounded annually on the amount in clause (a) above from the date of original
issuance of the Series A Preferred Stock to the date of distribution (the
"SERIES A CALCULATION DATE") PLUS (c) accrued and unpaid dividends, if any, on
the Series A Preferred Stock due under Section 3 (such sum being referred to as
the "SERIES A PREFERENTIAL AMOUNT"), or (2) the amount which the holders would
receive if the Series A Preferred Stock had converted to Common Stock
immediately prior to the distribution. If the assets and funds of the
Corporation shall be insufficient to permit the payment of the full Series A
Preferential Amount to the holders of Series A Preferred Stock, then the
remaining assets of the Corporation legally available for distribution shall be
distributed ratably among the holders of Series A Preferred Stock in accordance
with the aggregate liquidation preference of the shares of Series A Preferred
Stock held by each of them.

                           4.1.3. HOLDERS OF COMMON STOCK. After payment in full
of the Series B Preferential Amount and the amount required by Section 4.1.2,
the holders of Common Stock shall be entitled to share ratably in the remaining
assets without participation by the holders of either Series B Preferred Stock
or Series A Preferred Stock.

                  4.2. PUBLIC OFFERING. Upon the closing of an underwritten
public offering pursuant to an effective registration statement under the
Securities Act of 1933 covering the offer and sale of Common Stock for the
account of the Corporation to the public generally (the "PUBLIC OFFERING"), the
holders of the Series B Preferred Stock shall be entitled to receive an amount
equal to the lesser of (x) the Series B Preferential Amount or (y) the net
proceeds of the Public Offering.

         5.       VOTING RIGHTS; REPRESENTATIVE DIRECTORS; ETC.

                  5.1.      VOTES PER SHARE; NOTICES.

                           5.1.1. SERIES B PREFERRED STOCK. The holders of the
Series B Preferred Stock shall not be entitled to vote on any matter except (a)
as otherwise provided herein, or (b) as otherwise required by law.

<PAGE>   7


                           5.1.2. SERIES A PREFERRED STOCK. Except as otherwise
provided herein (including the election of Preferred Directors pursuant to
Section 5.2.1 and a majority of the members of the Corporation's Board of
Directors pursuant to Section 5.2.2) or required by law, the holders of Series A
Preferred Stock shall vote as a single class with the holders of Common Stock
and shall have such votes in respect of each share of Series A Preferred Stock
on any matter submitted to the holders of Common Stock as the number of shares
of Common Stock into which shares of Series A Preferred Stock may then be
converted. Record holders of Series A Preferred Stock shall be entitled to
notice of any stockholders' meeting or solicitation of stockholders' consents in
the manner provided in the Bylaws of the Corporation for general notices.

                  5.2.      SERIES A PREFERRED DIRECTORS.

                           5.2.1. REPRESENTATIVE DIRECTORS. In addition to the
rights set forth in Section 5.2.2, the holders of a majority of the shares of
Series A Preferred Stock, voting separately as a single class, shall be entitled
to elect two directors. Except as provided in Section 5.2.2, the number of
directors of the Corporation shall not exceed seven.

                           5.2.2.   MAJORITY DIRECTORS.

                                    (a) In the event that any Remedy Event shall
 occur, then, upon notice to the Corporation given by the Series A
Required Holders (a "REMEDY NOTICE"), the number of directors shall be increased
as provided in Section 5.2.2(b) and the holders of Series A Preferred Stock,
voting separately as a single class, shall become entitled to elect a majority
of the Board of Directors of the Corporation until any such Remedy Event shall
have been rectified or cured to the written satisfaction of the Series A
Required Holders, whereupon such right of the holders of the Series A Preferred
Stock to elect a majority of the Board of Directors of the Corporation shall
cease, and the maximum number of directors shall be reduced to seven, subject to
being again revived from time to time upon the reoccurrence of the conditions
above described.

                                    (b)  Immediately upon receipt by the
Corporation of a  Remedy Notice pursuant to paragraph (a) above, the
number of directors of the Corporation shall automatically be increased to the
minimum number sufficient to permit the election of additional directors so that
after such election a majority of directors will have been elected by the
holders of the Series A Preferred Stock. Upon such increase, the directors of
the Corporation shall thereupon be divided into classes. One class shall consist
of a number of directors equal to a majority of all of the directors and shall
be elected solely by the holders of Series A Preferred Stock, voting separately
as a single class, and the other class shall consist of the remaining directors
and shall be elected by the holders of the capital stock of the Corporation
entitled to vote generally in elections of directors. Subject to Section 7, any
director then in office who was elected pursuant to Section 5.2.1 shall
automatically become a member of the class of directors elected solely by the
holders of Series A Preferred Stock.

                  5.3. TENURE. Each Director elected by the holders of Series A
Preferred Stock pursuant to Section 5.2 (a "PREFERRED DIRECTOR") shall serve for
a term of the lesser of (a) one year and until such Preferred Director's
successor is elected and qualified, or (b) until the right to elect such
Preferred Director ceases (at which time such Preferred Director will be deemed
to be removed). So long as the holders of Series A Preferred Stock are entitled
to elect Preferred Directors, any vacancy in the position of a Preferred
Director may be filled only by vote of the holders of a majority of the shares
of Series A Preferred Stock entitled to vote thereon. A Preferred Director may,
during such Preferred Director's term of office, be removed at any time, with or
without cause, only by the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock.

         6.       REDEMPTION OF SERIES A PREFERRED STOCK.

<PAGE>   8

                  6.1. MANDATORY REDEMPTION. Except as set forth in Section 6.3
and Section 10.1(c), irrespective of any other redemptions or acquisitions of
shares of the Series A Preferred Stock, the Corporation will redeem at a price
equal to the Series A Preferential Amount that number of shares of Series A
Preferred Stock equal to 5% of the total number of issued and outstanding shares
of Series A Preferred Stock as of March 31, 2002 (or such lesser number as is
then outstanding) on the last day of each March, June, September and December,
commencing in June, 2002.

                  6.2.     MANDATORY CONTINGENT REDEMPTION.  Except as set forth
in Section 10.1(c), upon the earliest to occur of:

                           (a)  the sale by the Corporation of all or a
substantial portion of its assets,

                           (b)  the merger of the Corporation with, or the
consolidation of the Corporation into, any other corporation as a result of
which the stockholders of the Corporation immediately prior to such merger or
consolidation do not own stock having more than 50% of the outstanding voting
power (assuming conversion of all convertible securities and exercise of all
outstanding options and warrants) of the surviving corporation,

                           (c)  the dissolution or liquidation of the
Corporation,

                           (d)  Gerald Cerce ceasing for any reason to be
 Chairman of, and actively involved in the executive management of, the
Corporation and a replacement satisfactory to the Series A Required Holders
shall not be in place within 180 days,

                           (e)  except as a result of a Qualified Public
Offering and stock passing by death, more than 50% of the outstanding
voting stock of the Corporation becomes owned by Persons other than
(i) holders of Series A Preferred Stock and their transferees and (ii)
stockholders of record on the Original Issue Date (the foregoing events
described in clauses (a) through (e) shall constitute an "ORGANIC CHANGE"), or

                           (f)  a Remedy Event,

each holder of Series A Preferred Stock may require the Corporation to redeem
all or any portion of the then outstanding shares of the Series A Preferred
Stock of such holder, at the holder's option either (A) at a price equal to the
Series A Preferential Amount or (B) at a price equal to the sum of (1) the
Conversion Price plus (2) accrued and unpaid dividends, if any, on the Series A
Preferred Stock due under Section 3, together with, for purposes only of this
clause (B), Warrants on the same terms as described in Section 6.3.

                  6.3. VOLUNTARY REDEMPTION. Pursuant to the consent or vote of
a majority of the disinterested directors of the Corporation, the Corporation
may redeem at the Series A Preferential Amount pro rata from all holders of
Series A Preferred Stock an aggregate number of shares of Series A Preferred
Stock specified in the notice delivered pursuant to Section 6.4. Such redemption
shall take place at the time and on the date set forth in such notice. At the
closing of such redemption, the Corporation shall deliver to each holder of
Series A Preferred Stock whose shares are being redeemed warrants in
substantially the form of Exhibit 2.1A to the Purchase Agreement (the
"WARRANTS") to purchase the number of shares of Common Stock into which the
shares of Series A Preferred Stock so redeemed could at the time have been
converted at a purchase price per share equal to the aggregate cash
consideration received by the holder in connection with the redemption divided
by such number of shares of Common Stock. The number of shares for which each
Warrant shall be exercisable shall be reduced in proportion to the mandatory
redemption of Series A Preferred Stock under Section 6.1. At the option of the
Corporation, any redemption under this Section 6.3 may be applied against, and
shall relieve the Corporation of, the next succeeding redemption obligations
under Section 6.1 to the extent of the shares redeemed under this Section 6.3.

<PAGE>   9


                  6.4. NOTICE OF REDEMPTION: PRO RATA TREATMENT. Written notice
of redemption of Series A Preferred Stock pursuant to Sections 6.1 and 6.3 shall
be given not fewer than 30 days prior to the redemption date by first class
mail, postage prepaid, to each holder of record of shares of the Series A
Preferred Stock, at such holder's address on the books of the Corporation. Each
such notice shall state: (a) the redemption date; (b) the number of shares of
the Series A Preferred Stock to be redeemed; (c) the Preferential Amount; (d)
the place or places where certificates for such shares are to be surrendered for
payment of the Preferential Amount; and (e) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. Redemptions under
Sections 6.1 and 6.3 shall be made pro rata among all holders of Series A
Preferred Stock.

                  6.5. SPECIFIC PERFORMANCE. If any holder becomes obligated so
to deliver any shares of Series A Preferred Stock to the Corporation upon any
redemption under this Section 6 and fails to deliver the certificate therefor in
accordance with these Articles of Amendment, the Corporation may, at its option,
in addition to all other remedies it may have, cancel on its books such
certificate representing such shares to be redeemed.

         7. REDEMPTION OF SERIES B PREFERRED STOCK. Pursuant to the consent or a
vote of a majority of the disinterested directors of the Corporation, the
Corporation may redeem the Series B Preferred Stock in whole for the Series B
Preferential Amount at any time after the Guaranty is no longer in effect. Upon
the payment in full by the Corporation of the Series B Preferential Amount, the
outstanding shares of Series B Preferred Stock shall be canceled. The provisions
of Section 6.4 (excluding the last sentence thereof) and Section 6.5 shall apply
to any such redemption as if all references to Series A Preferred Stock were
replaced by references to Series B Preferred Stock. No redemption of the Series
B Preferred Stock in accordance with this Section 7 shall occur unless such
redemption complies with Section 4.07 of the Series A and Series B 10 3/4%
Senior Note Indenture dated as of July 21, 1998.

         8. REMEDY EVENT. The term "REMEDY EVENT" shall mean the occurrence and
continuance of any of the following events for a period exceeding 30 days
(unless otherwise specified below) after written notice of the occurrence of
such event has been furnished to the Corporation at its registered address:

                  (a) The Corporation shall fail to make any payment in respect
of dividends on or redemptions of any shares of Series A Preferred Stock as the
same shall become due.

                  (b) The Corporation shall fail to perform or observe any of
the material covenants, agreements or other provisions set forth in these
Articles of Amendment.

                  (c) Any written representation or warranty of or with respect
to the Corporation made in, or pursuant to the express requirements of, the
Purchase Agreement shall prove to have been false in any material respect on the
date as of which it was made without reference to whether such representation or
warranty was made with knowledge or without knowledge.

                  (d) The Corporation or any of its Subsidiaries shall fail to
make any required payment on any indebtedness exceeding $100,000 in principal
amount of (or guaranteed by) the Corporation or any of its Subsidiaries or with
respect to any share of capital stock (whether because funds are not legally
available therefor or otherwise), or the Corporation or any of its Subsidiaries
shall fail to perform or observe any of the covenants or provisions required to
be performed or observed by it pursuant to any senior lending agreement (as from
time to time in effect), and (i) such failure shall continue, without having
been duly cured, waived or consented to, beyond the period of grace, if any,
therein specified or (ii) any security interest in or other lien on any property
securing any such indebtedness shall be enforced, unless contested in good faith
by the Corporation by appropriate proceedings or (iii) any such indebtedness
shall become due and payable prior to stated maturity.


<PAGE>   10

                  (e) The Corporation shall fail to keep reserved a sufficient
number of shares of Common Stock for issuance upon conversion of the Series A
Preferred Stock or shall fail to issue an amount of shares of Common Stock upon
the conversion by the holders thereof of the Series A Preferred Stock.

                  (f)  An Organic Change shall occur.

                  (g) The sum of consolidated stockholders' equity of the
Corporation and its subsidiaries plus (to the extent not included in the
stockholder's equity) the Series A Preferred Stock plus up to $5,000,000
outstanding in respect of notes issued by the Corporation on the Original Issue
Date to its stockholders on such date and to the initial purchasers of the
Series A Preferred Stock, all determined in accordance with generally accepted
accounting principles consistently applied, shall at any time be less than
$19,500,000.

                  (h) A final judgment which, in the aggregate with other
outstanding final judgments against the Corporation or any of its Subsidiaries,
exceeds $500,000 above insurance coverage shall be rendered against the
Corporation or any of its Subsidiaries and, within 30 days after entry thereof,
such judgment shall not have been discharged or stayed pending appeal, or within
30 days after expiration of such stay such judgment shall not have been
discharged.

                  (i) The Corporation or any of its Subsidiaries or their
Affiliates shall fail to perform or observe any other covenant, other agreement
or provision to be performed or observed by it under the Purchase Agreement or
any Investor Agreement to which the Corporation is a party and such failure
shall not be rectified or cured to the satisfaction of the Series A Required
Holders within 30 days after actual knowledge by an executive officer of the
Corporation; PROVIDED, HOWEVER, that the breach by an employee of any employment
agreement between the Corporation and such employee shall not in any event
constitute a Remedy Event.

                  (j) The Corporation or any of its subsidiaries owning at least
20% of the assets, or contributing over the past fiscal year at least 20% of the
cash flow, of the Corporation and its subsidiaries on a consolidated basis
shall:

                           (i)  commence a voluntary case under Title 11 of the
United States as from time to time in effect, or authorize, by appropriate
proceedings of its board of directors or other governing body, the commencement
of such a voluntary case;

                           (ii)  have filed against it a petition commencing an
involuntary case under such Title 11 and such petition is not dismissed
 within 30 days;

                           (iii)  seek relief as a debtor under any applicable
law, other than such Title 11, of any jurisdiction relating to the liquidation
or reorganization of debtors or to the modification or alteration of the rights
 of creditors, or consent to or acquiesce in such relief;

                           (iv)  have entered against it any order by a court of
competent jurisdiction (A) finding it to be bankrupt or insolvent, (B) ordering
or approving its liquidation, reorganization or any modification or alteration
of the rights of its creditors, or (C) assuming custody of, or appointing a
receiver or other custodian for, all or a substantial part of its property; or

                           (v)  make an assignment for the benefit of, or enter
 into a composition with, its creditors, or appoint or consent to the
appointment of a receiver or other custodian for all or a substantial part of
its property.

         9.       CONVERSION.

                  9.1.     RIGHT OF CONVERSION.

<PAGE>   11

                           9.1.1.  SERIES A PREFERRED STOCK. Each share of
Series A Preferred Stock shall be convertible, at the option of the holder
thereof at any time at the office of the Corporation or any transfer
agent for the Series A Preferred Stock into the number of shares of the
Common Stock of the Corporation obtained by dividing $526.32 by the then
effective conversion price of the Series A Preferred Stock (as from time to time
adjusted by this Section 9, the "CONVERSION PRICE"). The initial Conversion
Price shall be $52.63 per share. All calculations under this Section 9 shall be
made to the nearest one hundredth of a cent.

                           9.1.2.   SERIES B PREFERRED STOCK.  Shares of Series
B Preferred Stock shall not be convertible into shares of the Common Stock of
the Corporation.

                  9.2. AUTOMATIC CONVERSION. Each share of Series A Preferred
Stock shall automatically be converted into shares of Common Stock at the then
effective Conversion Price at any time upon the closing of an underwritten
public offering pursuant to an effective registration statement under the
Securities Act of 1933, with managing underwriters reasonably satisfactory to
the Series A Required Holders, covering the offer and sale of Common Stock for
the account of the Corporation to the public generally providing net proceeds to
the Corporation (after underwriter commissions and discounts, but before other
offering expenses) of not less than $20,000,000 and at a price per share of
Common Stock equal to 175% of the initial Conversion Price, adjusted for stock
splits and stock dividends after the Original Issue Date (a "QUALIFIED PUBLIC
OFFERING").

                  9.3. MECHANICS OF CONVERSION. Before any holder of Series A
Preferred Stock shall be entitled to convert the same into shares of Common
Stock and to receive certificates therefor, such holder shall surrender the
Series A Preferred Stock certificates, duly endorsed, at the office of the
Corporation or of any transfer agent for the Series A Preferred Stock, and shall
give written notice to the Corporation at such office that such holder elects to
convert the same; PROVIDED, HOWEVER, that in the event of an automatic
conversion pursuant to Section 9..2, the outstanding shares of Series A
Preferred Stock shall be converted automatically without any further action by
the holders of such shares and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent; and PROVIDED,
FURTHER that the Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such automatic conversion
unless the certificates evidencing such shares of Series A Preferred Stock are
either delivered to the Corporation or its transfer agent as provided above, or
the holder notifies the Corporation or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement reasonably
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection with such certificates. The Corporation shall, as
soon as practicable after such delivery, or execution of such agreement in the
case of a lost certificate, issue and deliver at such office to such holder of
Series A Preferred Stock, a certificate or certificates for the number of shares
of Common Stock to which such holder shall be entitled as aforesaid and a check
payable to the holder in the amount of any cash amounts payable as the result of
a conversion into fractional shares of Common Stock plus all accrued and unpaid
dividends on such holder's Series A Preferred Stock so converted. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Series A Preferred Stock
to be converted, or in the case of automatic conversion immediately upon closing
of the Qualified Public Offering, and the person entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder of such shares of Common Stock on such date.

                  9.4.     ADJUSTMENT OF CONVERSION PRICE DUE TO ISSUANCE OF
ADDITIONAL SHARES.  The Conversion Price shall be subject to adjustment as
follows:

                           9.4.1.  SPECIAL DEFINITIONS.

                           (a) "OPTIONS" shall mean rights, options or warrants
to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.

<PAGE>   12

                                    (b)  "ORIGINAL ISSUE DATE" shall mean the
date on which the Series A Preferred Stock is first issued by the Corporation.

                                    (c) "CONVERTIBLE SECURITIES" shall mean any
indebtedness, shares or other securities convertible into or exchangeable for
Common Stock.

                                    (d)  "ADDITIONAL SHARES OF COMMON STOCK"
shall mean all shares of Common Stock issued (or, pursuant to Section 9.4.5,
deemed to be issued) by the Corporation after the Original Issue Date, other
than shares of Common Stock issued or issuable (or, pursuant to Section 9.4.5,
 deemed to be issued) at any time:

                                            (i)  upon conversion of the Series
A Preferred Stock authorized herein or upon exercise or conversion of the
Warrants or the other options and warrants set forth in Exhibit 4.3.1 to the
Purchase Agreement;

                                            (ii)  as a stock dividend, stock
split or similar distribution on the Series A Preferred Stock or any other
event for which adjustment is made pursuant to Section 9.4.3;

                                            (iii)  pursuant to a stock option,
stock bonus or other employee stock plan permitted by Section 5.14 of the
Purchase Agreement or approved by the Preferred Directors at a meeting or by
unanimous written consent of the Board of Directors or approved by the Series
A Required Holders, which approval shall specify the numbers of Common Stock
available for distribution under any such plan; or

                                            (iv)  by way of dividend or other
distribution on shares of Common Stock excluded from the definition of
Additional Shares of Common Stock by the foregoing clauses (i), (ii), (iii)
or this clause (iv); or

                                            (v)  in connection with sales of
Common Stock or other Future Shares to the holders of the Series A Preferred
Stock pursuant to the exercise by such holders of their
rights under Section 11.1.

                           9.4.2. NO ADJUSTMENT OF CONVERSION PRICE. No
adjustment in the Conversion Price shall be made in respect of the issuance of
Additional Shares of Common Stock (a) unless the consideration per share
(determined pursuant to Section 9.4.6) for an Additional Share of Common Stock
issued or deemed to be issued by the Corporation is less than the applicable
Conversion Price in effect on the date of, and immediately prior to, such issue
or (b) if prior to such issuance the Series A Required Holders give a written
waiver of such adjustment.

                           9.4.3. ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE
OF ADDITIONAL SHARES OF COMMON STOCK. In the event the Corporation shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section 9.4.5) for a consideration per share
less than the applicable Conversion Price of the Series A Preferred Stock in
effect on the date of and immediately prior to such issue, then and in such
event, the applicable Conversion Price shall be reduced, concurrently with such
issue (calculated to the nearest one hundredth of a cent), to a new Conversion
Price obtained by dividing (a) an amount equal to the sum of (i) the number of
shares of Common Stock outstanding immediately prior to such issue multiplied by
the then applicable Conversion Price and (ii) the consideration, if any, deemed
received by the Corporation upon such issue by (b) the total number of shares of
Common Stock deemed to be outstanding immediately after such issue; PROVIDED,
HOWEVER, that, for purposes of any calculation under this Section 9.4.3, all
shares of Common Stock outstanding and issuable upon conversion of outstanding
Options, Convertible Securities and the Series A Preferred Stock immediately
prior to giving affect to such calculation shall be deemed to be outstanding. In
no event will the Conversion Price be adjusted as the result of

<PAGE>   13



any issuance of any Additional Shares of Common Stock to any amount higher
than the Conversion Price in effect immediately prior to such issuance.

                           9.4.4. ADJUSTMENTS FOR SUBDIVISIONS, STOCK DIVIDENDS,
COMBINATIONS OR CONSOLIDATION OF COMMON STOCK. In the event the outstanding
shares of Common Stock shall be increased by way of stock issued as a dividend
for no consideration of subdivided (by stock split or otherwise) into a greater
number of shares of Common Stock, the respective Conversion Prices then in
effect shall, concurrently with the effectiveness of such increase or
subdivision, be proportionately decreased. In the event the outstanding shares
of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the respective
Conversion Prices then in effect shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.

                           9.4.5. DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON
STOCK - OPTIONS AND CONVERTIBLE SECURITIES. Except as provided in Section 9.4.3
or Section 9.4.4, in the event the Corporation at any time after the Original
Issue Date shall issue any Options or Convertible Securities or shall fix a
record date for the determination of holders of any class of securities entitled
to receive any such Options or Convertible Securities, then the maximum number
of shares (as set forth in the instrument relating thereto without regard to any
provisions contained therein for a subsequent adjustment of such number) of
Common Stock issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue or, in case such a record date shall have
been fixed, as of the close of business on such record date; PROVIDED, HOWEVER,
that Additional Shares of Common Stock shall not be deemed to have been issued
unless the consideration per share (determined pursuant to Section 9.4.6) of
such Additional Shares of Common Stock would be less than the applicable
Conversion Price in effect on the date of, and immediately prior to, such issue,
or such record date, as the case may be; and PROVIDED, FURTHER, that in any such
case in which Additional Shares of Common Stock are deemed to be issued:

                           (a) no further adjustment in the applicable
Conversion Price shall be made upon the subsequent issue of shares of Common
Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities of upon the subsequent issue of each Convertible
Securities or Options;

                           (b) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Corporation, or any increase in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the applicable Conversion Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon shall, upon any such increase becoming
effective, be recomputed to reflect such increase insofar as it affects such
Options or the rights of conversion or exchange under such Convertible
Securities;

                           (c) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the applicable Conversion Price computed upon the
original issue thereof (or upon the occurrence of a record date with respect
thereto), and any subsequent adjustments based thereon shall remain in effect
upon and after such expiration, but the Additional Shares of Common Stock deemed
issued as the result of the original issue of such Option or rights shall not be
deemed issued for the purposes of any subsequent adjustment to the Conversion
Price;

                           (d) in the event of any changes in the number of
shares of Common Stock issuable upon the exercise, conversion or exchange of
such Options or Convertible Securities, including a change resulting from the
anti-dilution provisions thereof, the Conversion Price then in effect shall be
readjusted to the Conversion Price that would have been in effect if the
adjustment which was made upon the issuance of such Options or Convertible
Securities had been made upon the basis of such change;

<PAGE>   14


                           (e) no readjustment pursuant to clauses (b) or (d)
above shall have the effect of increasing the applicable Conversion Price to an
amount which exceeds the lower of (i) the applicable Conversion Price on the
original adjustment date, or (ii) the applicable Conversion Price that resulted
from the issuance or deemed issuance of other Additional Shares of Common Stock
between the original adjustment date and such readjustment date; and

                           (f) in the event the Corporation amends the terms of
any Options or Convertible Securities (whether such Options or Convertible
Securities were outstanding on the Original Issue Date or were issued after the
Original Issue Date), then such Options or Convertible Securities, as so
amended, shall be deemed to have been issued after the Original Issue Date and
the provisions of this Section 9.4.5 shall apply.

                        9.4.6. DETERMINATION OF CONSIDERATION. For purposes
of this Section 9.4, the consideration received by the Corporation for the issue
of any Additional Shares of Common Stock shall be computed as follows:

                                    (a)  CASH AND PROPERTY:  Such consideration
 shall:

                                            (i)  insofar as it consists of cash,
be computed at the aggregate amount of net cash proceeds received by the
Corporation excluding amounts paid or payable for accrued interest or accrued
dividends;

                                            (ii) insofar as it consists of
property other than cash, be computed at the fair value thereof at the time of
such issue, as determined in good faith by the Board of Directors of the
Corporation; and

                                            (iii) in the event Additional Shares
of Common Stock are issued together with other shares or securities or other
assets of the Corporation for consideration which covers both, be the
proportion of such consideration so received, computed as provided in
clauses (i) and (ii) above, which is allocated to the Additional shares
of Common Stock as determined in good faith by the Board of Directors.

                                    (b)  OPTIONS AND CONVERTIBLE SECURITIES:
The consideration per share received by the Corporation for Additional Shares
 of Common Stock deemed to have been issued pursuant to Section 9.4.5,
relating to Options and Convertible Securities, shall be determined by dividing

                                            (i)  the total amount, if any,
received or receivable by the Corporation as consideration for the issue
of such Options or Convertible Securities, plus, subject to Section
9.4.5(b), the minimum aggregate amount of additional consideration
(as set forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities by

                                            (ii)  the maximum number of shares
of Common Stock (as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent adjustment of
such number) issuable upon the exercise of such Options or the conversion of
 exchange of such Convertible Securities.

                           9.4.7. OTHER DILUTIVE EVENTS. In case any event shall
occur as to which the other provisions of this Section 9.4 are not strictly
applicable, but the failure to make any adjustment in the Conversion Price would
not fairly protect the conversion rights represented by the Series A Preferred
Stock in accordance with the intention of this Section 9, then, upon request of
the Series A Required Holders, the Board of Directors of the Corporation shall
appoint a firm of independent public accountants of recognized national

<PAGE>   15


standing (which may be the regular auditors of the Corporation) to give their
opinion as to the adjustment, if any, on a basis consistent with the intention
of this Section 9, necessary to preserve without dilution the conversion rights
represented by the Series A Preferred Stock. Upon receipt of such opinion, the
Corporation will promptly furnish a copy thereof to the holders of the Series A
Preferred Stock and the Conversion Price shall be adjusted in accordance
therewith to the extent recommended by such accountants. The fees and expenses
of such accountants shall be paid by the Corporation; PROVIDED, HOWEVER, that if
such accountants opine that the total adjustment per share of Series A Preferred
Stock is less than 10% of the previous per share Conversion Price, such fees and
expenses will be paid by the holders of the Series A Preferred Stock.

                  9.5. OTHER DISTRIBUTIONS. In the event the Corporation shall
declare a distribution payable in securities of the Corporation (other than
shares of Common Stock), securities of other entities, securities evidencing
indebtedness issued by the Corporation or other entities, assets (including cash
dividends) or options or rights, then, in each such case for the purpose of this
Section 9, the holders of the Series A Preferred Stock shall be entitled to a
proportionate share of any such distribution as though they were the holders of
the number of shares of Common Stock of the Corporation into which their shares
of such Series A Preferred Stock were convertible as of the record date fixed
for the determination of the holders of Common Stock of the Corporation entitled
to receive such distribution.

                  9.6. SUBSEQUENT EVENTS. In the event of any recapitalization,
consolidation or merger of the Corporation or its successor which does not
require redemption of the Series A Preferred Stock pursuant to Section 6.2, the
shares of Series A Preferred Stock shall be convertible into such shares or
other interests as the Series A Preferred Stock would have been entitled if the
Series A Preferred Stock had been converted into Common Stock immediately prior
to such event.

                  9.7. CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of
each adjustment or readjustment of the Conversion Price pursuant to this Section
9, the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series A Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment is
based. The Corporation shall, upon the written request at any time of any holder
of Series A Preferred Stock, furnish or cause to be furnished to such holder a
certificate setting forth (a) all such adjustments and readjustments previously
made, (b) the Conversion Price at the time in effect, and (c) the number of
shares of Common Stock and the amount, if any, of other property which at such
time would be received upon the conversion of Series A Preferred Stock.

                  9.8. ISSUE TAX. The issuance of certificates for shares of
Common Stock upon conversion of Series A Preferred Stock shall be made without
charge to the holders thereof for any issuance tax; 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 certificate in a
name other than the name of the holder of the Series A Preferred Stock which is
being converted.

         10.      COVENANTS.

                  10.1. SERIES B PREFERRED STOCK SPECIAL RESTRICTIONS. At any
time when shares of Series B Preferred Stock are outstanding, in addition to any
other vote required by law or the Articles of Incorporation, as amended, without
the consent of the Series B Required Holders, given in writing or by vote at a
meeting, consenting or voting (as the case may be) separately as a class, the
Corporation will not:

                           (a) create or authorize the creation of any
additional class or series of shares of stock, or issue any shares thereof,
unless the same ranks junior to the Series B Preferred Stock as to the
distribution of assets on the liquidation, dissolution or winding up of the
Corporation or increase the authorized amount of the Series B Preferred Stock or
increase the authorized amount of any additional class or series of shares of
stock unless the same ranks junior to the Series B Preferred Stock as to the
distribution of assets on the liquidation,


<PAGE>   16

dissolution or winding up of the Corporation, or create or authorize any
instrument or security convertible into shares of Series B Preferred Stock
or into shares of any other class or series of stock unless the same
ranks junior to the Series B Preferred Stock as to the distribution of
assets on the liquidation, dissolution or winding up of the Corporation, whether
any such creation, authorization or increase shall be by means of amendment to
the Articles of Incorporation or by merger, consolidation or otherwise:

                           (b)  amend, alter or repeal its Articles of
Incorporation or By-Laws in a manner that is adverse to the holders of
Series B Preferred Stock in any respect or for which the holders of
Series B Preferred Stock did not receive prior written notice;

                           (c)  purchase or set aside any sums for the purchase
of any shares of stock other than the Series B Preferred Stock, except
for redemptions of Series A Preferred Stock in accordance with Section 6 and
the purchase of shares of Common Stock from former employees of the
Corporation who acquired such shares directly from the Corporation or
the Stock Option Plan (as defined in the Purchase Agreement), if each
such purchase is made pursuant to contractual rights held by the
Corporation relating to the termination of employment of any such former
employee and the total purchase price does not exceed $200,000 plus any
applicable life insurance payments for all such purchases from each such former
employee;
                           (d)  redeem or otherwise acquire any shares of
Series B Preferred Stock except pursuant to a purchase offer made pro rata
to all holders of the shares of Series B Preferred Stock on the basis of the
 aggregate number of outstanding shares of Series B Preferred Stock then eld by
 each such holder;

                           (e)  consent to any liquidation, dissolution or
winding up of the Corporation; or

                           (f)  consolidate or merge into or with any other
entity or entities or sell or transfer all or substantially all its assets,
except that the Corporation may effectuate a merger or consolidation (a) in
which (i) the Corporation is the surviving corporation and (ii) the stockholders
of the Corporation immediately prior to the merger hold more than 50% of the
outstanding voting power of the surviving corporation (assuming conversion of
all convertible securities and exercise of all outstanding options and warrants)
or (b) where provision is made for payment in full of the Series B Preferential
Amount at the time of consummation of the merger or consolidation.

                  10.2. SERIES A PREFERRED STOCK SPECIAL RESTRICTIONS. At any
time when shares of Series A Preferred Stock are outstanding, except where the
vote or written consent of the holders of a greater number of shares of the
Corporation is required by law or by the Articles of Incorporation, as amended,
and in addition to any other vote required by law or the Articles of
Incorporation, as amended, without the consent of the Series A Required Holders,
given in writing or by vote at a meeting, consenting or voting (as the case may
be) separately as a class, the Corporation will not:

                           (a)  create or authorize the creation of any
 additional class or series of shares of stock, or issue any shares
thereof, unless the same ranks junior to the Series A Preferred Stock as
to the distribution of assets on the liquidation, dissolution or winding up of
the Corporation or increase the authorized amount of the Series A Preferred
Stock or increase the authorized amount of any additional class or series of
shares of stock unless the same ranks junior to the Series A Preferred Stock as
to the distribution of assets on the liquidation, dissolution or winding up of
the Corporation, or create or authorize any instrument or security convertible
into shares of Series A Preferred Stock or into shares of any other class or
series of stock unless the same ranks junior to the Series A Preferred Stock as
to the distribution of assets on the liquidation, dissolution or winding up of
the Corporation, whether any such creation, authorization or increase shall be
by means of amendment to the Articles of Incorporation or by merger,
consolidation or otherwise:

                           (b)  amend, alter or repeal its Articles of
Incorporation or By-Laws in a manner that is adverse to the holders of
Series A Preferred Stock in any respect or for which the holders of Series
A Preferred Stock did not receive prior written notice;
<PAGE>   17


                           (c) purchase or set aside any sums for the purchase
of any shares of stock other than the Series A Preferred Stock, except for
redemptions of Series B Preferred Stock in accordance with Section 7 and the
purchase of shares of Common Stock from former employees of the Corporation who
acquired such shares directly from the Corporation or the Stock Option Plan (as
defined in the Purchase Agreement), if each such purchase is made pursuant to
contractual rights held by the Corporation relating to the termination of
employment of any such former employee and the total purchase price does not
exceed $200,000 plus any applicable life insurance payments for all such
purchases from each such former employee;

                           (d) redeem or otherwise acquire any shares of Series
A Preferred Stock except as expressly authorized in Section 6 or pursuant to a
purchase offer made pro rata to all holders of the shares of Series A Preferred
Stock on the basis of the aggregate number of outstanding shares of Series A
Preferred Stock then held by each such holder;

                           (e) consent to any liquidation, dissolution or
winding up of the Corporation; or

                           (f) consolidate or merge into or with any other
entity or entities or sell or transfer all or substantially all its assets,
except that the Corporation may, without the consent of the holders of at least
a majority of the then outstanding shares Series A Preferred Stock, effectuate a
merger in which (i) the Corporation is the surviving corporation and (ii) the
stockholders of the Corporation immediately prior to the merger hold more than
50% of the outstanding voting power of the surviving corporation (assuming
conversion of all convertible securities and exercise of all outstanding options
and warrants).

                  10.3. NO IMPAIRMENT. The Corporation will not by amendment of
its Articles of Incorporation or through any reorganization, recapitalization,
transfer of all or a substantial portion of its assets, consolidation, merger,
dissolution, issue or sale of securities, closing of transfer books or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under these Articles of Amendment by the
Corporation, but will at all times in good faith assist in carrying out all the
provisions of these Articles of Amendment and in taking all such action as may
be necessary or appropriate in order to protect the all rights of the holders of
Preferred Stock against impairment.

                  10.4. RESERVATION OF SHARES. So long as any share of Series A
Preferred Stock shall remain outstanding, the Corporation shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
capital stock, for the purpose of issuance upon conversion of the Series A
Preferred Stock, the full number of shares of Common Stock then issuable upon
exercise of all outstanding shares of Series A Preferred Stock. If the
Corporation's Common Stock shall be listed on any national stock exchange, the
Corporation at its expense shall include in its listing application all of the
shares of Common Stock reserved for issuance upon conversion of the Series A
Preferred Stock (subject to issuance or notice of issuance to the exchange) and
will similarly procure the listing of any further Common Stock reserved for
issuance upon conversion of the Series A Preferred Stock at any subsequent time
as a result of adjustments in the outstanding Common Stock or otherwise.

                  10.5. VALIDITY OF SHARES. The Corporation will from time to
time take all such action as may be required to assure that all shares of Common
Stock which may be issued upon conversion of any share of the Series A Preferred
Stock will, upon issuance, be legally and validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issuance thereof. Without limiting the generality of the foregoing, the
Corporation will from time to time take all such action as may be required to
assure that the par value per share, if any, of the Common Stock is at all times
equal to or less than the lowest quotient obtained by dividing the then current
par value of the Series A Preferred Stock by the number of shares of Common
Stock into which each shares of Series A Preferred Stock can, from time to time,
be converted.

                  10.6.    NOTICE OF CERTAIN EVENTS.  If at any time:

<PAGE>   18


                           (a) the Corporation shall declare any dividend or
distribution payable to the holders of its Common Stock;

                           (b) the Corporation shall offer for subscription pro
rata to the holders of Common Stock any additional shares of stock of any class
or any other rights;

                           (c) any recapitalization of the Corporation, or
consolidation or merger of the Corporation with, or sale of all or substantially
all of its assets to, another corporation or business organization shall occur;
or

                           (d) a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation shall occur;

then, in any one or more of such cases, the Corporation shall give the
registered holders of the Preferred Stock written notice, by registered mail, of
the date on which a record shall be taken for such dividend, distribution or
subscription rights or for determining stockholders entitled to vote upon such
recapitalization, consolidation, merger, sale, dissolution, liquidation or
winding up and of the date when any such transaction shall take place, as the
case may be. Such notice shall also specify the date as of which the holders of
Common Stock of record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such recapitalization,
consolidation, merger, sale, dissolution, liquidation or winding up, as the case
may be. Such written notice shall be given 20 days prior to the record date with
respect thereto.

                  10.7. NO REISSUANCE OF PREFERRED STOCK. No shares of Preferred
Stock acquired by the Corporation by reason of redemption, purchase, conversion
or otherwise shall be reissued, and all such shares shall be canceled, retired
and eliminated from the shares which the Corporation shall be authorized to
issue. The Corporation may from time to time take such appropriate corporate
action as may be necessary to reduce the authorized number of shares of
Preferred Stock accordingly.

         11.      SERIES A PREEMPTIVE RIGHTS.

                  11.1. RIGHT OF FIRST OFFER. Until the closing, including the
closing under any over-allotment option, under a Qualified Public Offering, the
Corporation shall not issue or sell any Common Stock (including securities
convertible into, or options, warrants or other rights to purchase Common Stock,
but excluding the shares described in Section 11.7) (collectively, the "FUTURE
SHARES") to any Person (an "OFFEREE") without first providing each holder of
Series A Preferred Stock the right to subscribe for its Proportionate Percentage
of the Future Shares at a price and on such other terms which are at least as
favorable as shall have been offered or are proposed to be offered by the
Corporation to such Offeree and which shall have been specified by the
Corporation in a notice delivered to each holder of Series A Preferred Stock
(the "PROPOSAL"); PROVIDED, HOWEVER, that the holder of Series A Preferred Stock
shall have the option to purchase Future Shares with cash, regardless of the
method of purchase offered to such Offeree. The Proposal by its terms shall
remain open and irrevocable for a period of 30 days from the date it is
delivered by the Corporation to each holder of Series A Preferred Stock (the
"FUTURE SHARES EXERCISE PERIOD"). The Proposal shall also certify that the
Corporation has either (a) received a bona fide offer from a prospective
purchaser, who shall be identified in such certification, and that the
Corporation in good faith believes a binding agreement of sale is obtainable for
consideration having a fair market, cash equivalent or present value set forth
in such certification; or (b) intends in good faith to make an offering of its
securities to prospective purchasers, who shall be identified to the extent
possible in such certification at the price and on the terms set forth in such
certification.

         "PROPORTIONATE PERCENTAGE" means, for any holder of Series A Preferred
Stock, the percentage of Future Shares covered by the Proposal equal to (i) the
number of shares of Common Stock into which the shares of


<PAGE>   19


Series A Preferred Stock held by such holder would then be convertible
divided by (ii) the total number of shares of Common Stock outstanding
at the time of delivery of the Proposal plus the aggregate number of shares
of Common Stock into which all shares of Series A Preferred Stock would
then be convertible.

                  11.2. NOTICE. Notice of each holder of Series A Preferred
Stock's intention to accept the Proposal made pursuant to Section 11.1 shall be
evidenced by writing signed by such holder and delivered to the Corporation
prior to the end of the Future Shares Exercise Period (the "NOTICE OF PURCHASE")
setting forth that portion of the Future Shares such holder elects to purchase
(the "ACCEPTED SHARES"). The failure of a holder to deliver such a Notice of
Purchase shall constitute a rejection of the Proposal.

                  11.3. FULL ACCEPTANCE. In the event that each holder of Series
A Preferred Stock elects to purchase all of the shares offered to such holder in
the Proposal, the Corporation shall sell to each such holder, pursuant to
Section 11.6, the number of Accepted Shares set forth in such holder's Notice of
Purchase.

                  11.4. PARTIAL ACCEPTANCE. In the event that one or more
holders of Series A Preferred Stock do not elect to purchase all of the shares
offered to such holders in the Proposal, the Corporation shall sell to each such
holder, pursuant to Section 11.6, the number of Accepted Shares, if any, set
forth in such holder's Notice of Purchase. Holders of Series A Preferred Stock
may purchase pursuant to Section 11.6 any remaining shares offered in the
Proposal not purchased by the other holders of Series A Preferred Stock pro rata
based on the respective Proportionate Percentages of such holders wishing to
purchase additional shares, or as they may otherwise agree.

                  11.5. NO FRACTIONAL SHARES. For the purpose of avoiding
fractions as to Future Shares, the Corporation may adjust upward or downward by
not more than one full share the number of Future Shares which any holder of
Series A Preferred Stock would otherwise be entitled to purchase.

                  11.6. SALE OF SHARES. No later than 30 days after the
expiration of the Future Shares Exercise Period, the Corporation shall deliver
to each holder of Series A Preferred Stock who has submitted a Notice of
Purchase to the Corporation a notice indicating the number of Future Shares
which the Corporation shall sell to such holder pursuant to this Section 11 and
the terms and conditions of such sale, which shall be in all respects (including
unit price and interest rates) the same as specified in the proposal. The sale
to such holders of such Future Shares shall take place not later than 10 days
after receipt of such notice.

         Any sale to an Offeree of Future Shares that were not selected for
purchase by the holders of Series A Preferred Stock as provided above shall take
place not later than 90 days after the expiration of the Future Shares Exercise
Period. Such sale shall be upon terms and conditions in all respects (including
unit price and interest rates) which are no more favorable to such Offeree or
less favorable to the Corporation than those set forth in the Proposal. Any
refused Future Shares not purchased by the Offeree as contemplated by the
Proposal within the 90-day period specified above shall remain subject to this
Section 11.

                  11.7.    EXCLUSION OF CERTAIN SHARES.  Notwithstanding any
contrary provision of this Section 11, Future Shares shall not include:

                           11.7.1.  shares of Common Stock issuable upon
conversion of the Series A Preferred Stock or upon exercise or conversion of
the Warrants.

                           11.7.2.  shares of Common Stock issued pursuant to
the exercise of options granted under a stock option plan described in
Section 9.4.1(d).

                           11.7.3.  shares of Common Stock issued in
connection with mergers permitted by section 5.9 of the Purchase Agreement or
otherwise permitted to be issued by section 5.14 of the Purchase Agreement.

<PAGE>   20


                           11.7.4.  shares of Common Stock issued to the
original holders of Series A Preferred Stock pursuant to the Purchase Agreement.

         12.      AMENDMENTS.

                  12.1. SERIES B PREFERRED STOCK. The provisions of these terms
relating to the Series B Preferred Stock may not be amended, modified or waived
without the written consent or affirmative vote of the Series B Required
Holders.

                  12.2. SERIES A PREFERRED STOCK. The provisions of these terms
relating to the Series A Preferred Stock may not be amended, modified or waived
without the written consent or affirmative vote of the Series A Required
Holders; PROVIDED, HOWEVER, that any amendment reducing or postponing the
payment of dividends or redemptions or postponing or increasing the amount of
the Conversion Price shall require the written consent or affirmative vote of
holders of 90% of the then outstanding shares of Series A Preferred Stock.

                  12.3. OTHER CLASSES OF CAPITAL STOCK. Except as provided in
this Section 12 and to the extent required by law, the vote of the holders of
any class of capital stock of the Corporation is not required for the amendment,
modification or waiver of the terms of these Articles of Amendment.

         13. ADDITIONAL SHARES OF PREFERRED STOCK. The Corporation may issue
such additional series of Preferred Stock as the Board of Directors may
establish by the adoption of a resolution or resolutions relating thereto, each
such additional series to have such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative, participating, optional
or other special rights and qualifications, limitations or restrictions thereof,
as shall be stated and expressed in the resolution or resolutions providing for
the issue of such series adopted by the Board of Directors pursuant to authority
to do so, which authority is hereby granted to the Board of Directors. Unless
otherwise expressly set forth in the designation therefor, no series of
Preferred Stock shall have the right to vote as a class in connection with the
issuance of any additional series of Preferred Stock, whether such additional
series shall have rights greater, lesser or identical to the rights of any
existing series of Preferred Stock."