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                          CERTIFICATE OF DESIGNATION OF
               THE POWERS, DESIGNATIONS, PREFERENCES AND RIGHTS OF
                         THE SERIES A PREFERRED STOCK OF
                        MEDICAL TECHNOLOGY SYSTEMS, INC.

                          Pursuant to the provisions of
             Section 151(g) of the Delaware General Corporation Law

     Medical  Technology  Systems,  Inc., a company organized and existing under
the laws of Delaware (the "Corporation"), certifies that the Corporation's Board
of Directors, by written consent, adopted the following resolution:

                    A RESOLUTION OF THE BOARD OF DIRECTORS OF
                        MEDICAL TECHNOLOGY SYSTEMS, INC.
                            CREATING AND AUTHORIZING
                    A SERIES OF PREFERRED STOCK DESIGNATED AS
                            SERIES A PREFERRED STOCK
                         AND FIXING AND DETERMINING THE
                     RELATIVE RIGHTS AND PREFERENCES THEREOF

     RESOLVED,  pursuant to the authority expressly granted by the provisions of
the Certificate of Incorporation of Medical Technology Systems, Inc., a Delaware
corporation  (the  "Corporation"),  the  Corporation's  Board of Directors  (the
"Board")  creates and  authorizes  the issuance of a series of preferred  stock,
designated  as the Series A Preferred  Stock,  par value  $0.0001 per share (the
"Series A Preferred  Stock"),  to consist of 10,000 shares,  plus any additional
shares  that may be issued in payment  of  dividends  on the Series A  Preferred
Stock, and fixes the  designation,  dividend  rights,  voting powers,  rights on
liquidation or dissolution, conversion rights and other preferences and relative
participating,  optional  or  other  special  rights,  and  the  qualifications,
limitations  or  restrictions  of the shares of such series (in  addition to any
attributes set forth in the Corporation's  Certificate of Incorporation that are
applicable to all series of the Corporation's preferred stock) as follows:

     1. Number of Shares.  The series of Preferred Stock designated and known as
Series A  Convertible  Participating  Preferred  Stock (the  "Series A Preferred
Stock") shall consist of 10,000 shares,  plus any additional  shares that may be
issued in payment of  dividends  on the Series A Preferred  Stock in  accordance
with Section 3.

     2. Voting. Except as may be otherwise provided in these terms of the Series
A Preferred  Stock or by law, the Series A Preferred  Stock shall vote  together
with all other classes and series of stock of the  Corporation as a single class
on all actions to be taken by the  stockholders of the  Corporation,  including,
but not limited to, actions  amending the  certificate of  incorporation  of the
Corporation  to increase or decrease the number of  authorized  shares of Common
Stock.  Each share of Series A Preferred  Stock shall entitle the holder thereof
to such  number of votes per share on each such action as shall equal the number
of shares of Common Stock (including fractions of a share) into which each share
of Preferred Stock is then convertible.

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     3.  Dividends.  Subject to the terms of the  Intercreditor  Agreement,  the
holders of each  outstanding  share of the  Series A  Preferred  Stock  shall be
entitled  to  receive,  out of funds  legally  available  therefor,  when and if
declared by the Board of Directors, quarterly dividends, payable on the last day
of each March, June,  September and December,  beginning  September 30, 2002, at
the rate per annum of $110.00 per share.  Dividends shall accrue from day to day
from the date of issuance of each share of Series A Preferred Stock,  whether or
not earned or declared,  and shall be cumulative.  Dividends shall be calculated
on the basis of a year of 360 days and the actual number of days  elapsed.  Each
dividend  on the  Series A  Preferred  Stock  shall  be paid in cash or,  if the
Corporation  shall so elect,  in additional  shares of Series A Preferred  Stock
(including  fractional  shares to the third decimal  place),  with each share of
Series A Preferred  Stock in which a dividend is being paid valued at $1,000 per
share.

     4. Liquidation.

          (a)  Liquidation  Preference.  Upon any  liquidation,  dissolution  or
     winding  up of the  Corporation,  whether  voluntary  or  involuntary,  the
     holders of shares of Series A Preferred Stock shall first be entitled to be
     paid,  before any  distribution or payment is made upon the Common Stock or
     any other class or series of capital stock  ranking  junior to the Series A
     Preferred  Stock  as to  participation  in  distributions  on  liquidation,
     distribution or winding up ("Liquidation Junior Stock"), the greater of -

               (1) $1,000 per share,  plus all  dividends  accrued and unpaid at
          the date of payment, whether or not declared, or

               (2) the amount the holder of shares of Series A  Preferred  Stock
          would have  received had such holder  converted  such shares to Common
          Stock immediately  prior to such liquidation,  distribution or winding
          up of the Corporation.

If upon such liquidation,  dissolution or winding up of the Corporation, whether
voluntary  or  involuntary,  the assets to be  distributed  among the holders of
Series A Preferred  Stock shall be insufficient to permit payment in full to the
holders of the Series A  Preferred  Stock of the full  amounts to which they are
entitled,  then the entire assets of the Corporation to be so distributed  shall
be  distributed  ratably  among  the  holders  of  Series A  Preferred  Stock in
proportion  to the full  amounts  to  which  they  are  entitled.  Upon any such
liquidation,  dissolution or winding up of the Corporation, after the holders of
Series A Preferred  Stock shall have been paid in full the amounts to which they
are  entitled,  the  remaining  net  assets  of the  Corporation  available  for
distribution  shall be distributed among the holders of Liquidation Junior Stock
(including  the  Common  Stock)  according  to the  preferences  and  priorities
applicable to each.

          (b) Notice. Written notice of such liquidation, dissolution or winding
     up,  stating a payment  date,  the amount of the  payments  to be made with
     respect to each share of Series A Preferred  Stock and the place where such
     payments  shall be  payable,  shall  be  delivered  in  person,  mailed  by
     certified  or  registered  mail,  return  receipt  requested,  or  sent  by
     telecopier, not less than 20 days prior to the payment date stated therein,
     to the  holders of record of Series A  Preferred  Stock,  such notice to be
     addressed to each such holder at its address as shown by the records of the
     Corporation.

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          (c)  Certain  Transactions  to  Constitute  Liquidation,  etc.  Unless
     otherwise  agreed to by the holders of a majority  of the then  outstanding
     shares of Series A Preferred  Stock,  the following shall be deemed to be a
     liquidation,  dissolution  or  winding  up of the  Corporation  within  the
     meaning of the provisions of this Section:  (1) any consolidation or merger
     of the Corporation  into or with any other entity or entities (other than a
     merger solely to reincorporate the Corporation in a different  jurisdiction
     or a merger with a Wholly-Owned Subsidiary of the Corporation);  or (2) the
     sale, lease, abandonment,  transfer or other disposition by the Corporation
     of all or  substantially  all of the  assets  of the  Corporation  and  its
     Subsidiaries (on a consolidated basis).

     5. Restrictions. 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
Corporation's  certificate of  incorporation,  and in addition to any other vote
required by law or the Corporation's  certificate of incorporation,  without the
approval of the holders of a majority of the then outstanding shares of Series A
Preferred Stock, 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 (other than stock that is  Liquidation  Junior Stock and
     ranks junior to the Series A Preferred Stock as to the payment of dividends
     ("Dividend  Junior Stock")) 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 (other than stock that is  Liquidation  Junior
     Stock and Dividend  Junior Stock,  or create or authorize any obligation or
     security convertible into shares of Series A Preferred Stock or into shares
     of any other class or series of stock (other than stock that is Liquidation
     Junior  Stock  and  Dividend  Junior  Stock),  whether  any such  creation,
     authorization or increase shall be by means of amendment to the certificate
     of incorporation or by merger, consolidation or otherwise.

          (b)  Create,  incur or suffer to exist  any  indebtedness  that (1) is
     subordinated  by  its  express  terms  to  any  other  indebtedness  of the
     Corporation and (2) either (A) is a Convertible  Security, or (B) is issued
     with Options (whether or not detachable), or (C) has an equity feature. For
     this purpose,  indebtedness is not "subordinated" solely by reason of being
     unsecured.  This  subsection  (b) does not apply to the  Corporation's  14%
     Senior  Subordinated Notes issued pursuant to the same Securities  Purchase
     Agreement pursuant to which the Series A Preferred Stock is issued.

          (c)  Consent  to any  liquidation,  dissolution  or  winding up of the
     Corporation,  or  consolidate  or merge  into or with any  other  entity or
     entities or sell, lease,  abandon,  transfer or otherwise dispose of all or
     substantially   all  its   assets,   or  initiate   any   recapitalization,
     reorganization  or proceeding  under any federal or state bankruptcy law or
     similar law.

          (d) Amend its  certificate of  incorporation  or by-laws in any manner
     that  adversely  affects  the rights of the  holders of Series A  Preferred
     Stock.

          (e)  Purchase  or set aside any sums for the  purchase  of, or pay any
     dividend or make any  distribution  on, any shares of stock (other than the
     Series A Preferred  Stock),  except for  dividends  or other  distributions
     payable  on the Common  Stock  solely in the form of  additional  shares of
     Common Stock, or permit any Subsidiary of the Corporation to do so.

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          (f)  Redeem or  otherwise  acquire  any  shares of Series A  Preferred
     Stock,  or  permit  any  subsidiary  of the  Corporation  to do so,  except
     pursuant  to a  purchase  offer  made pro rata to all  holders  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.

          (g) Permit the Corporation's  board of directors to have more or fewer
     than five members;  permit more than two of the Corporation's  directors to
     be officers or employees of the  Corporation or any of its  affiliates;  or
     permit  the  Corporation's  board  of  directors  not to have  (1) an audit
     committee,  the  composition of which complies with the rules of the Nasdaq
     Stock Market, and (2) a compensation  committee,  a majority of the members
     of which are not  officers or employees  of the  Corporation  or any of its
     affiliates.

     6. Reporting and Information Requirements

          (a) For so long as any of the Series A Preferred Stock is outstanding,
     the Corporation will permit any  representatives  designated by the holders
     of a majority of the outstanding shares of Series A Preferred Stock, during
     normal business hours and upon  reasonable  notice to (1) visit and inspect
     any of the properties of the Corporation and its Subsidiaries,  (2) examine
     the corporate and financial records of the Corporation and its Subsidiaries
     and make copies thereof or extracts  therefrom and (3) discuss the affairs,
     finances and accounts of any such companies  with the directors,  officers,
     key  employees  and  independent  accountants  of the  Corporation  and its
     Subsidiaries;  provided,  that in no event shall such inspection  impede or
     interrupt  the  normal  business   operations  of  the   Corporation.   The
     Corporation  will reimburse the holders of the Series A Preferred Stock for
     their reasonable  expenses  (including travel) incurred under the preceding
     sentence for not more than one such  examination per year. The presentation
     of an  executed  copy of these  terms by the  holders of a majority  of the
     outstanding  shares  of  Series  A  Preferred  Stock  to the  Corporation's
     independent accountants will constitute the Corporation's permission to its
     independent  accountants to  participate in discussions  with such persons.
     The holders of Series A Preferred Stock and their designated representative
     shall maintain the  confidentiality  of any  confidential  and  Proprietary
     Information  so obtained by them or obtained by any board observer which is
     not  otherwise  available  from other  sources  that are free from  similar
     restrictions;  provided,  however, that the foregoing shall in no way limit
     or  otherwise  restrict  the  ability of the  holders of Series A Preferred
     Stock or such authorized  representatives  to disclose any such information
     concerning  the  Corporation  which they may be required to disclose (i) to
     their  partners  to  the  extent   required  to  satisfy  their   fiduciary
     obligations  to such persons (so long as the partners  agree to be bound by
     the  confidentiality  provisions  hereof), or (ii) otherwise as required by
     law. The holders of the Series A Preferred Stock (i) acknowledge  that they
     may, from time to time, be in  possession  of non-public  information  as a
     result  of the  information  regarding  the  Corporation  granted  to  them
     hereunder, and (ii) agree not to trade in the securities of the Corporation
     while in possession of any material, non-public information in violation of
     applicable law.

          (b) For so long as any of the Series A Preferred Stock is outstanding,
     the Corporation will furnish each Holder with the following:

               (i) As soon as  practicable,  and in any case within  thirty (30)
          days after the end of each  calendar  month,  the  monthly  management
          reporting package in the form customarily  prepared by the Corporation
          from time to time,  but minimally  including (A) an unaudited  balance

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          sheet as of the last day of such month, (B) an unaudited  statement of
          income for such month,  together with a cumulative statement of income
          from the first day of the then current  fiscal year to the last day of
          such month,  and (C) a statement  of cash flows for such month,  and a
          comparison   between  the  actual  figures  for  such  month  and  the
          comparable  figures (with respect to clauses (A) and (B) only) for the
          prior year period  along with  management  commentary.  The  foregoing
          financial statements shall be accompanied by an Officers'  Certificate
          to the effect  that such  statements  fairly  present in all  material
          respects  the  financial   position  and  financial   results  of  the
          Corporation for the fiscal period covered,  qualified by the fact that
          the Corporation may need to make adjustments to the foregoing  figures
          as  determined  by  the  Corporation's  auditors  in  accordance  with
          generally accepted accounting procedures.

               (ii) As soon as practicable and in any event within 90 days after
          the end of each  fiscal  year  commencing  with the fiscal year ending
          March 31, 2002,  an annual  independent  certified  audit  prepared by
          nationally recognized certified public accountants.

               (iii) Not later than the beginning of each fiscal year, an annual
          operating  plan  with  budget  for  the  Corporation,   including  the
          Corporation's capital budget, for the coming fiscal year.

               (iv)  Promptly  upon receipt  thereof,  any  additional  reports,
          management   letters   or  other   detailed   information   concerning
          significant  aspects of the  Corporation's  operations  and  financial
          affairs given to the Corporation by its independent  accountants  (and
          not otherwise  contained in other materials  provided pursuant to this
          Section 7.2).

               (v) Within fifteen days after transmission thereof, copies of all
          financial statements, proxy statements,  reports and any other general
          written communications which the Corporation sends to its shareholders
          and/or  lenders  and  copies of all  registration  statements  and all
          regular,  special  or  periodic  reports  which  it  files,  with  the
          Securities and Exchange  Commission or with any securities exchange on
          which any of its securities  are then listed,  and copies of all press
          releases  and  other  statements  made  available   generally  by  the
          Corporation  to the public  concerning  material  developments  in the
          Corporation's business.

               (vi) From time to time upon  request  of any  Holder,  such other
          information  as the  Corporation  is required by law to furnish to any
          stockholder on request.

          (c) The  holders of a majority of the  outstanding  Series A Preferred
     Stock have the right (so long as the  outstanding  Series A Preferred Stock
     represents  at least  one-half  of the shares of Series A  Preferred  Stock
     initially issued under the Purchase  Agreement) to appoint one observer who
     shall have the right to attend all  meetings of the board of  directors  of
     the  Corporation  and  all  committee  meetings  of such  board;  provided,
     however,  that, so long as the holders of the Series A Preferred Stock, the
     Notes or the Warrants shall have the right to appoint such an observer, all
     shall appoint the same  observer,  the identity of which will be determined
     (i) by the requisite  holders of the Notes until the principal and interest
     of the Notes are  repaid in full,  (ii)  thereafter,  by the  holders  of a

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     majority of the outstanding Warrants, and (iii) thereafter,  by the holders
     of the  majority of the issued and  outstanding  Series A Preferred  Stock.
     Notwithstanding anything to the contrary, the Corporation shall be entitled
     to exclude  such  observer  from any board  discussions  (and  withhold any
     related materials) materially affecting the relationship of the Corporation
     or any of its  Subsidiaries to any holder of Series A Preferred  Stock, the
     Warrants or the Notes.

          (d) If for any period the  Corporation  shall have any  Subsidiary  or
     Subsidiaries,  then in respect  of such  period  the  financial  statements
     delivered  pursuant  to  subsections  (i) and (ii) of  Section  6(b)  shall
     include consolidating  (unaudited) and consolidated financial statements of
     the Corporation and its Subsidiaries.

     7. Conversion. The holders of shares of Series A Preferred Stock shall have
the following conversion rights:

          (a) Right to  Convert.  Subject  to the terms and  conditions  of this
     Section,  the  holder of any share or  shares of Series A  Preferred  Stock
     shall have the right, at its option at any time, to convert any such shares
     of  Series A  Preferred  Stock  (except  that upon any  liquidation  of the
     Corporation  the  right  of  conversion  shall  terminate  at the  close of
     business on the business day fixed for payment of the amount  distributable
     on the  Series A  Preferred  Stock)  into  the  number  of  fully  paid and
     nonassessable  shares of Common  Stock  equal to the  quotient  obtained by
     dividing (i) the product  obtained by  multiplying  the number of shares of
     Series A  Preferred  Stock to be  converted  by $1,000 by (ii) $2.36  (such
     amount, as adjusted from time to time pursuant to Section 8, being referred
     to as the "Conversion Price").  Such right of conversion shall be exercised
     by the holder  thereof by giving  written  notice that the holder elects to
     convert a stated  number of shares of Series A Preferred  Stock into Common
     Stock and by surrender of a certificate or  certificates  for the shares so
     to be converted to the  Corporation at its principal  office (or such other
     office or agency of the  Corporation  as the  Corporation  may designate by
     notice in writing to the  holders of the Series A  Preferred  Stock) at any
     time during its usual  business hours on the date set forth in such notice,
     together  with a statement of the name or names (with  addresses)  in which
     the certificate or certificates for shares of Common Stock shall be issued.

          (b) Issuance of Certificates; Time Conversion Effected. Promptly after
     the  receipt  of the  written  notice  referred  to in  subsection  (a) and
     surrender of the  certificate  or  certificates  for the share or shares of
     Series A Preferred Stock to be converted,  the Corporation  shall issue and
     deliver, or cause to be issued and delivered, to the holder,  registered in
     such name or names as such holder may direct, a certificate or certificates
     for the number of whole shares of Common Stock issuable upon the conversion
     of such  share  or  shares  of  Series A  Preferred  Stock.  To the  extent
     permitted by law, such conversion shall be deemed to have been effected and
     the Conversion Price shall be determined as of the close of business on the
     date  on  which  such  written  notice  shall  have  been  received  by the
     Corporation and the  certificate or  certificates  for such share or shares
     shall have been  surrendered  as aforesaid,  and at such time the rights of
     the holder of such share or shares of Series A Preferred Stock shall cease,
     and the  person  or  persons  in whose  name or names  any  certificate  or
     certificates  for  shares  of  Common  Stock  shall be  issuable  upon such
     conversion  shall be deemed to have  become the holder or holders of record
     of the shares represented thereby.

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          (c) Fractional Shares; Dividends;  Partial Conversion. The Corporation
     shall  not be  required  to issue  fractional  shares  of  Common  Stock on
     conversion of the Series A Preferred  Stock, but it may elect to do so, and
     if  fractional  shares are so issued,  the  Corporation  need not carry the
     fraction to more than three decimal places.  In lieu of issuing  fractions,
     or smaller  fractions,  of a share,  the  Corporation  may  (subject to the
     Intercreditor  Agreement)  pay the holder  cash equal to the product of (1)
     any  fraction of a share of Common  Stock  otherwise  issuable  and (2) the
     Market Price of a share of Common Stock. No payment or adjustment  shall be
     made upon any  conversion  on account of any cash  dividends  on the Common
     Stock issued upon such conversion. In case the number of shares of Series A
     Preferred Stock represented by the certificate or certificates  surrendered
     pursuant to  subsection  (a) exceeds  the number of shares  converted,  the
     Corporation shall, upon such conversion, execute and deliver to the holder,
     at the expense of the  Corporation,  a new certificate or certificates  for
     the number of shares of such Series A Preferred  Stock  represented  by the
     certificate or certificates surrendered which are not to be converted.

          (d) Stock to be Reserved.  The  Corporation  will at all times reserve
     and keep  available  out of its  authorized  Common  Stock,  solely for the
     purpose of issuance  upon the  conversion  of Series A  Preferred  Stock as
     herein  provided,  such  number of shares of Common  Stock as shall then be
     issuable  upon  the  conversion  of all  outstanding  shares  of  Series  A
     Preferred Stock. The Corporation  covenants that all shares of Common Stock
     which shall be so issued  shall be duly and  validly  issued and fully paid
     and nonassessable  and free from all taxes,  liens and charges with respect
     to  the  issue  thereof,  and,  without  limiting  the  generality  of  the
     foregoing,  the  Corporation  covenants that it will from time to time take
     all such action as may be  requisite to assure that the par value per share
     of the  Common  Stock is at all times  equal to or less  than the  Series A
     Conversion  Price in effect at the time. The Corporation will take all such
     action as may be  necessary  to assure that all such shares of Common Stock
     may be so issued without violation of any applicable law or regulation,  or
     of any  requirement  of any  national  securities  exchange  upon which the
     Common Stock may be listed.  The Corporation will not take any action which
     results in any adjustment of the applicable  Conversion  Price if the total
     number of shares of Common Stock issued and issuable after such action upon
     conversion of the Series A Preferred Stock would exceed the total number of
     shares of Common Stock then authorized by the certificate of incorporation,
     as amended.

          (e) No  Reissuance  of Preferred  Stock.  Shares of Series A Preferred
     Stock which are  converted  into shares of Common Stock as provided  herein
     shall not be reissued.

          (f) 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 in respect thereof,  provided 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  that of the  holder  of the  Series  A
     Preferred Stock which is being converted.

          (g)  Closing  of  Books.  The  Corporation  will at no time  close its
     transfer  books against the transfer of any Series A Preferred  Stock or of
     any shares of Common Stock issued or issuable  upon the  conversion  of any
     shares of Preferred  Stock in any manner which  interferes  with the timely
     conversion  of such Series A Preferred  Stock,  except as may  otherwise be
     required to comply with applicable securities laws.

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                                       8

          (h) Mandatory Conversion.  If at any time the Corporation shall effect
     a firm  commitment  underwritten  public offering of shares of Common Stock
     for the account of the  Corporation  pursuant to an effective  registration
     statement under the Securities Act of 1933 in which (1) the proceeds to the
     Corporation  (net of  underwriting  discounts and  commissions and offering
     expenses) shall be at least $35,000,000 and (2) the price per share paid by
     the  public  for such  shares  shall  be at least  $8.00  per  share,  then
     effective  immediately before the closing of the sale of such shares by the
     Corporation  pursuant to such public  offering,  all outstanding  shares of
     Series A Preferred  Stock shall  automatically  convert to shares of Common
     Stock on the basis set forth in this Section. Holders of shares of Series A
     Preferred  Stock  so  converted  may  deliver  to  the  Corporation  at its
     principal  office (or such other office or agency of the Corporation as the
     Corporation  may designate by notice in writing to such holders) during its
     usual business hours,  the  certificate or  certificates  for the shares so
     converted.  As promptly as practicable  thereafter,  the Corporation  shall
     issue and  deliver to such holder a  certificate  or  certificates  for the
     number of whole  shares of Common  Stock to which such holder is  entitled,
     together with any cash  dividends and payment in lieu of fractional  shares
     to which such holder may be entitled pursuant to subsection (c). Until such
     time as a holder of shares of Series A Preferred  Stock shall surrender its
     certificates  therefor as provided above, such certificates shall be deemed
     to solely  represent  the shares of Common Stock to which such holder shall
     be entitled upon the surrender thereof.

     8. Dilution Adjustments to and Related Provisions.

     The number of shares of Common  Stock  into  which the  Series A  Preferred
Stock  shall  be  convertible  and the  Conversion  Price  shall be  subject  to
adjustment from time to time upon the occurrence of certain events,  as provided
in this Section.  For purposes of this Section,  "Common Stock" means the Common
Stock (as defined in Section 11) and any other stock of the Corporation, however
designated,  that has the right to participate in any distribution of the assets
or earnings of the Corporation without limit as to per share amount.

          (a) Adjustment  for Change in Capital Stock.  If at any time after the
     date hereof, the Corporation:

               (1) pays a dividend or makes a  distribution  on its Common Stock
          in shares of its Common Stock;

               (2)  subdivides  its  outstanding  shares of Common  Stock into a
          greater number of shares;

               (3)  combines  its  outstanding  shares  of Common  Stock  into a
          smaller number of shares;

               (4) makes a  distribution  on its  Common  Stock in shares of its
          capital stock other than Common Stock; or

               (5) issues by  reclassification of its Common Stock any shares of
          its capital stock;

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                                       9


then the number of shares of Common Stock issuable upon conversion of the Series
A Preferred Stock and the Conversion Price, as in effect immediately prior to
such action, shall be adjusted so that the holders may receive upon conversion
of the Series A Preferred Stock the number of shares of capital stock of the
Corporation which the holders would have owned immediately following such action
if the holders had converted the Series A Preferred Stock immediately prior to
such action. The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification. If
after an adjustment a holder of Series A Preferred Stock upon conversion may
receive shares of two or more classes or series of capital stock of the
Corporation, the Corporation shall determine the allocation of the adjusted
Conversion Price between the classes or series of capital stock. After such
allocation, the exercise privilege and the Conversion Price of each class or
series of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section. Such adjustment
shall be made successively whenever any event listed above shall occur.

(b) Adjustment for Common Stock Issuances. If at any time after the date of this
Agreement the Corporation issues (other than in an Exempt Issuance or in a
transaction described in subsection (a) or (e)) shares of Common Stock for a
consideration per share less than the Market Price, determined as of the date of
issuance of such shares, the Conversion Price shall be reduced in accordance
with the following formula:

                                           P
                                 O  +   -------
                                           M
                CP9 =  CP  x    ------------------------
                                           O9

where:         CP9  =  the adjusted Conversion Price;

               CP   =  the then current Conversion Price;

               O    =  the number of shares of Common Stock outstanding
                       immediately prior to the issuance of such additional
                       shares;

               P    =  the aggregate consideration received for the issuance
                       of such additional shares;

               M    =  the Market Price, determined as of the date of issuance
                       of such shares; and

               O9   =  the number of shares of Common Stock outstanding
                       immediately after the issuance of such additional
                       shares.

The adjustment shall be made successively whenever any such issuance occurs, and
shall become effective immediately after such issuance.

<PAGE>
                                       10


          (c) Adjustment for  Convertible  Securities  Issuance.  If at any time
     after the date  hereof  the  Corporation  issues  (other  than in an Exempt
     Issuance or in a transaction  described in subsection  (a)) any Convertible
     Securities  for  an  aggregate  consideration  which,  when  added  to  the
     aggregate  consideration  payable for the number of shares of Common  Stock
     initially  deliverable  upon  conversion,  exchange  or  exercise  of  such
     Convertible  Securities,  is less than the product of such number of shares
     of Common Stock and the Market Price, determined as of the date of issuance
     of such  Convertible  Securities,  the Conversion Price shall be reduced in
     accordance with the following formula:

                                                  P
                                        O  +   -------
                                                  M
                        CP9 =  CP  x  ------------------------
                                               O  +  C

where:           CP9 =  the adjusted Conversion Price.

                 CP  =  the then current Conversion Price;

                 O   =  the number of shares of Common Stock outstanding
                        immediately prior to the issuance of such
                        Convertible Securities;

                 P   =  the sum of the aggregate consideration received for
                        the issuance of such Convertible Securities plus the
                        additional consideration, if any, payable upon
                        conversion, exchange or exercise of such Convertible
                        Securities at the initial conversion, exchange or
                        exercise rate;

                 M   =  the Market Price, determined as of the date of issuance
                        of such Convertible Securities; and

                 C   =  the maximum number of shares deliverable upon
                        conversion, exchange or exercise of such Convertible
                        Securities at the initial conversion, exchange or
                        exercise rate.

     The  adjustment  shall be made  successively  whenever  any  such  issuance
     occurs, and shall become effective  immediately after such issuance. If all
     of the Common Stock  deliverable upon  conversion,  exchange or exercise of
     such  Convertible  Securities  has not been  issued  when such  Convertible
     Securities  are no longer  outstanding,  then the  Conversion  Price  shall
     promptly  be  readjusted  to the  Conversion  Price  which would then be in
     effect had the adjustment upon the issuance of such securities been made on
     the basis of the  actual  number of shares  of  Common  Stock  issued  upon
     conversion, exchange or exercise of such Convertible Securities.

          (d) Adjustment for Rights Issue.  If at any time after the date hereof
     the Corporation  distributes any rights, options or warrants to all holders
     of its Common Stock  entitling  them for a period  expiring  within 60 days
     after the record date mentioned below to purchase shares of Common Stock or
     Convertible Securities at a price per share (or with an initial conversion,
     exchange or exercise  price per share) less than the Market Price per share
     on that record date,  the  Conversion  Price shall be reduced in accordance
     with the following formula:

<PAGE>

                                     11



                                       N x P
                                O + ---------
                                         M
                 CP9  =  CP x  ------------------
                                      O  +  N

 where:      CP9  =  the adjusted Conversion Price;

             CP   =  the then current Conversion Price;

             O    =  the number of shares of Common Stock outstanding on the
                     record date;

             N    =  the number of additional shares of Common Stock covered
                     by the rights, options, warrants or Convertible Securities;

             P    =  the offering price per share (including the initial
                     conversion, exchange or exercise price, in the case of
                     Convertible Securities) of the additional shares; and

             M    =  the Market Price determined as of the record date.

     The  adjustment  pursuant  to this  subsection  shall be made  successively
     whenever any such  rights,  options or warrants are issued and shall become
     effective  immediately  after  the  record  date for the  determination  of
     stockholders entitled to receive the rights, options or warrants. If at the
     end of the  period  during  which such  rights,  options  or  warrants  are
     exercisable, not all rights, options or warrants shall have been exercised,
     the Conversion Price shall be immediately  readjusted to what it would have
     been if "N" in the above  formula  had been the  number of shares  actually
     issued.

          (e) Adjustment for Distribution on or Purchase or Redemption of Common
     Stock.  If at any  time  after  the  date  hereof  the  Corporation  or any
     Subsidiary  of the  Corporation  (1)  distributes  to the holders of Common
     Stock any of the assets (including cash), debt securities, preferred stock,
     or rights to purchase debt  securities,  preferred stock or common stock of
     the Corporation or any of its  Subsidiaries,  or (2) redeems,  purchases or
     otherwise  acquires for value any shares of Common  Stock,  the  Conversion
     Price shall be reduced in accordance with the following formula:


                                  (M x O) - F
                CP9  =  CP x  --------------------
                                   M x (O - N)

where:        CP9  =  the adjusted Conversion Price;

              CP   =  the then current Conversion Price;


<PAGE>
                                       12


              M    =  the Market Price determined as of the date on which
                      the distribution, redemption, purchase or acquisition
                      occurs;

              O    =  the number of shares of Common Stock outstanding
                      immediately before the distribution, redemption, purchase
                      or acquisition;

              F    =  the aggregate amount of cash plus the Fair Market
                      Value of the aggregate non-cash consideration or
                      securities distributed to holders of Common Stock or
                       paid for all shares of Common Stock so redeemed,
                      purchased or acquired; and

              N    =  the number of shares of Common Stock so redeemed,
                      purchased or acquired.

     No  adjustment  shall be required  under this  subsection on account of the
     first $50,000 paid by the Corporation  after the date hereof to acquire odd
     lots (less than 100 shares) of Common Stock.

          (f) No Increase in Conversion  Price. In no event shall any adjustment
     made  pursuant to subsection  (b), (c), (d) or (e) increase the  Conversion
     Price.

          (g) Adjustment in Number of Conversion Shares. Upon each adjustment in
     the Conversion Price pursuant to any provision of this Section,  the number
     of shares of Common  Stock  into  which  the  Series A  Preferred  Stock is
     convertible  shall be  adjusted,  to the nearest one  hundredth  of a whole
     share,  to the product  obtained by  multiplying  the number of shares into
     which the Series A Preferred Stock is convertible immediately prior to such
     adjustment in the  Conversion  Price by a fraction,  the numerator of which
     shall be the Conversion Price  immediately prior to such adjustment and the
     denominator  of which shall be the Conversion  Price in effect  immediately
     thereafter,   determined   without   reference  to   subsection   (k).  All
     calculations under this Section shall be made to the nearest ten-thousandth
     of a cent and to the nearest hundredth of a share.

          (h)  Deferral  of  De  Minimis  Adjustments.   No  adjustment  in  the
     Conversion  Price  need be made  unless  the  adjustment  would  require an
     increase or decrease of at least one percent in the Conversion  Price.  Any
     adjustments  that are not made  shall be  carried  forward  and taken  into
     account in any later adjustment.

          (i)  Consideration  Received.  In  any  calculation  of  consideration
     received for purposes of this Section, the following shall apply:

               (1) in the case of the  issuance  of shares  of  Common  Stock or
          Convertible Securities for cash, the consideration shall be the amount
          of such cash,  before deduction for  commissions,  discounts and other
          expenses of the issuance; and

               (2) in the case of the  issuance  of shares  of  Common  Stock or
          Convertible  Securities for a consideration  in whole or in part other
          than cash, the consideration other than cash shall be deemed to be the
          Fair Market Value thereof.

<PAGE>
                                       13


          (j) When No  Adjustment  Required.  No  adjustment  need be made for a
     change in the par value,  or from par value to no par value, or from no par
     value to par value,  of the Common Stock.  To the extent the holders become
     entitled to receive cash upon exercise of the Warrants,  no adjustment need
     be made thereafter as to the cash. Interest will not accrue on the cash.

          (k) Par Value. Notwithstanding any other provision of this Section, no
     adjustment to the Conversion  Price shall reduce the Conversion Price below
     the then par value per share of the Common  Stock,  and any such  purported
     adjustment  shall instead  reduce the  Conversion  Price to such par value.
     However,  in  applying  subsection  (g),  the  "Conversion  Price in effect
     immediately   thereafter"  shall  be  determined  without  regard  to  this
     subsection.

     (l) Notice of Certain Transactions. If:

          (1) the Corporation  takes any action that would require an adjustment
     in the Conversion Price pursuant to this Section,

          (2) there is a liquidation or dissolution of the Corporation, or

          (3) a Liquidity Event occurs,

          the  Corporation  shall mail to holders of Series A Preferred  Stock a
     notice describing the event and stating applicable record date or, if there
     is no record date,  the  effective  date.  The  Corporation  shall mail the
     notice at least 30 days before such date if  practicable,  but in any event
     not less than ten days  before the time the  holders of Series A  Preferred
     Stock would be required to convert their Series A Preferred  Stock in order
     to  participate  in the  transaction on the same basis as holders of Common
     Stock.  Failure to mail the notice or any defect in it shall not affect the
     validity of the transaction.

          Whenever the Conversion  Price or the number of shares of Common Stock
     issuable upon  conversion of the Series A Preferred Stock shall be adjusted
     pursuant to this  Section,  the  Corporation  shall as soon as  practicable
     prepare a certificate  signed by its President or a Vice President  setting
     forth in reasonable  detail the event requiring the adjustment,  the amount
     of the adjustment,  the method by which the adjustment was calculated,  the
     Market  Price (if  applicable),  and the  number of shares of Common  Stock
     issuable  upon  conversion  of the Series A Preferred  Stock  after  giving
     effect to such adjustment, and shall as soon as practicable cause copies of
     such  certificate  to be mailed (by first  class,  postage  prepaid) to the
     registered holders of the Series A Preferred Stock.

     (m) Reorganization of the Corporation.

          If the  Corporation  consolidates or merges with or into, or transfers
     or leases all or  substantially  all its assets to, any person  (other than
     one  of  its  Wholly-Owned   Subsidiaries),   upon   consummation  of  such
     transaction  the  Series  A  Preferred  Stock  shall  automatically  become
     convertible  into the kind and amount of  securities,  cash or other assets
     which the holder of Series A Preferred  Stock would have owned  immediately
     after  the  consolidation,  merger,  transfer  or lease if the  holder  had
     converted the Series A Preferred Stock  immediately  before the record date
     (or, if none, the effective date) of the transaction.


<PAGE>
                                       14

          Notwithstanding  the preceding  paragraph,  in the case of any merger,
     reverse stock split,  or other  transaction in which the Common Stock shall
     be converted into the right to receive a consideration consisting solely of
     cash, then each holder of Series A Preferred Stock,  without having to take
     any action other than the  surrendering of such Series A Preferred Stock to
     the  Corporation,  shall  receive  the  amount  by  such  holder  if it had
     converted its Series A Preferred Stock immediately  before the record date,
     or, if none, the effective date of such transaction.

          If this subsection applies,  subsections (a), (b), (c), (d) and (e) do
     not apply.

          (n)  Violation of Other  Provisions.  Nothing in this Section shall be
     deemed to waive any  restriction  on the  Corporation  set forth  elsewhere
     herein.

     9. No Impairment. The Corporation will not, by amendment of its certificate
of incorporation or through any consolidation, merger, reorganization,  transfer
of  assets,  dissolution,  issue or sale of  securities  or any other  voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of the Series A Preferred  Stock,  but will at all times in good faith assist in
the  carrying  out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holders of the
Series A Preferred Stock against dilution or other impairment.  Without limiting
the generality of the foregoing,  the  Corporation (1) will take all such action
as may be necessary or appropriate in order that the Corporation may validly and
legally  issue  fully  paid and  nonassessable  shares  of  Common  Stock on the
conversion of the Series A Preferred Stock from time to time outstanding and (2)
will not take any action which results in any adjustment of the Conversion Price
if the total number of Series A Preferred  Stock shares of Common Stock issuable
after the action  upon the  conversion  of all of the Series A  Preferred  Stock
would exceed the total number of shares of Common Stock then  authorized  by the
Corporation's  certificate  of  incorporation  and available for the purposes of
issue upon such exercise.

     10. Pre-emptive Rights.

          (a) Except as  provided in  subsection  (b),  the  Holders  shall have
     pre-emptive  rights with respect to the issuance by the  Corporation of any
     of its  securities,  and  the  Corporation  shall,  prior  to any  proposed
     issuance by the Corporation of any of its securities,  offer to each Holder
     by written notice the right, for a period of 15 Business Days, to purchase,
     for cash at an amount equal to the price or other  consideration  for which
     such  securities  are proposed to be issued,  the portion of the securities
     proposed to be issued determined by dividing the number of shares of Common
     Stock into which the Series A Preferred  Stock is then  convertible  by the
     number of shares of Common Stock then outstanding  (treating as outstanding
     for  this  purpose  all  shares  of  Common  Stock  issuable  on  exercise,
     conversion or exchange of outstanding Convertible Securities).

          (b)  Subsection  (a) shall not apply (1) to debt  securities  that are
     neither  Convertible  Securities  nor issued as part of a transaction  that
     includes equity securities or Convertible Securities;  or (2) to securities
     issued (A) pursuant to an Exempt  Issuance,  (B) as  consideration  for the
     acquisition  from an  unaffiliated  third  party of all or part of  another
     business (whether by purchase of stock or assets or otherwise), or (C) in a
     transaction described in Section 8(a).

<PAGE>
                                       15

          (c) The Corporation's written notice to the Holders shall describe the
     securities proposed to be issued by the Corporation and specify the number,
     price and payment terms. Each Holder may accept the Corporation's  offer as
     to the full number of securities  covered by  subsection  (a) or any lesser
     number, by written notice thereof given by it to the Corporation and to the
     other  Holders  prior to the  expiration  of the  aforesaid 15 Business Day
     period,  in which event the Corporation shall promptly sell and each Holder
     shall buy, upon the terms specified,  the number of securities agreed to be
     purchased by such Holder.  The Corporation  shall be free at any time prior
     to 120 days after the date of its notice of offer to the Holders,  to offer
     and sell to any third  party or parties  the  securities  not agreed by the
     Holders to be  purchased by them,  at a price and on payment  terms no less
     favorable to the  Corporation  than those specified in such notice of offer
     to the  Holders.  However,  if  such  third  party  sale or  sales  are not
     consummated  within such 90-day period, the Corporation shall not sell such
     securities  as shall not have been  purchased  within such  period  without
     again complying with this Section.

          (d) If the Holders in the aggregate  elect to purchase more securities
     than they are entitled to purchase under  subsection (a), each Holder shall
     purchase such  securities (1) in the proportion  that all electing  Holders
     shall agree among themselves in writing,  notice of which shall be given in
     writing  to the  Corporation  not later  than one  business  day before the
     issuance,  sale and purchase is scheduled to be  completed,  or (2) failing
     such  agreement in the proportion  that the amount of securities  that such
     Holder elects to purchase  bears to the amount of securities  elected to be
     purchased by all Holders.

     11.  Definitions.  As used  herein,  the  following  terms  shall  have the
following meanings.

     "Affiliate"  of any  Person  means  any  other  Person  that  controls,  is
controlled by or is under common control with such Person.

     "Business  Day" means any day on which the New York Stock  Exchange is open
for trading.

     "Common  Stock" means the Common Stock,  par value $0.01 per share,  of the
Corporation as constituted on the date hereof,  except as otherwise  provided in
Section 8 and in the definition of "Convertible Securities."

     "Conversion  Shares" means shares of Common Stock received on conversion of
the Series A Preferred Stock.

     "Conversion Price" is defined in Section 7(a).

     "Convertible   Securities"   means   securities  or  obligations  that  are
exercisable for, convertible into or exchangeable for shares of Common Stock (as
defined in Section 8). The term  includes  options,  warrants or other rights to
subscribe  for or purchase  Common Stock or to subscribe  for or purchase  other
Convertible Securities.

<PAGE>
                                       16

     "Dividend Junior Stock" is defined in Section 5(a).

     "Exempt Issuance" means (a) the issuance of Common Stock upon the exercise,
conversion  or exchange of  Convertible  Securities,  (b) the issuance of Common
Stock or Convertible  Securities in a bona fide  underwritten  public  offering,
registered  under the Securities  Act, (c) the issuance of Common Stock pursuant
to any plan of the  Corporation  for the  reinvestment  of dividends on the same
class of capital stock,  (d) the issuance after the date hereof for compensation
purposes  of  options  to  purchase  up to  155,000  shares of  Common  Stock to
officers,   employees  or  directors  of,  or  bona  fide  consultants  to,  the
Corporation,  (e) the  issuance of Common  Stock  pursuant to Section 2.C of the
Executive Stock  Appreciation  Rights and Non Qualified Stock Option  Agreement,
dated as of February 6, 1995,  between the  Corporation  and Todd E. Siegel,  as
amended  October 28,  2000,  and (f) the  issuance of Common  Stock  pursuant to
Section  3.c of, and Exhibit A to, the  Employment  Agreement,  effective  as of
March 2, 2001, between the Corporation and Michael P. Conroy.

     "Fair  Market  Value" of property  other than cash means (1) in the case of
any security traded in the Nasdaq Stock Market,  listed on a securities exchange
or reported on the NASD OTC bulletin  board,  its Market  Price,  and (2) in all
other cases,  the fair market value of the property as  determined in good faith
by the Board of Directors of the Corporation, subject to the appraisal procedure
described  below.  In  connection  with any  transaction  described  herein that
requires the determination of the Fair Market Value of property, the Corporation
will notify the holders of the Series A Preferred  Stock in writing of the terms
of the transaction and of the amount  determined by the Board of Directors to be
the Fair Market Value of the property,  including a description of the valuation
method.  If the holders of a majority of the Series A  Preferred  Stock  believe
that the Corporation's  notice  incorrectly  states the Fair Market Value of the
property,  the holders of a majority of the Series A Preferred  Stock may engage
an  independent  appraisal  firm  selected  by them (the "First  Appraiser")  to
determine  the Fair  Market  Value of the  property.  The  report  of the  First
Appraiser  shall be  conclusive  on the question of the Fair Market Value of the
property unless,  within 15 Business Days after its receipt of the report of the
First  Appraiser,  the Corporation  appoints an independent  appraisal firm (the
"Second  Appraiser") and notifies the holders of Series A Preferred Stock of the
identity of the Second Appraiser.  If the reports of the First Appraiser and the
Second  Appraiser  are within 10 percent of the lower of the two,  report of the
First  Appraiser  shall  conclusively  establish  the Fair  Market  Value of the
property.  Otherwise,  the First Appraiser and the Second Appraiser will jointly
appoint a third  appraiser  reasonably  satisfactory  to the Corporation and the
holders of a majority of the Series A Preferred  Stock (the "Third  Appraiser").
The report of the Third Appraiser shall be averaged with the report of the First
Appraiser  or the  Second  Appraiser,  whichever  shall be closer to that of the
Third Appraiser,  and the average shall  conclusively  establish the Fair Market
Value of the  property.  Each  appraiser  will be  instructed  to  complete  its
appraisal within 30 days after its appointment.  The Corporation will permit all
appraisers  appointed  hereunder  to have  reasonable  access  to its  books and
records, to its officers and employees, and to its accountants.  The Corporation
will pay the cost of the First  Appraiser.  If the adjustment  based on the Fair
Market  Value as finally  determined  exceeds the  adjustment  based on the Fair
Market Value  stated in the  Corporation's  notice by more than 10 percent,  the
Corporation will pay the cost of the Second Appraiser; otherwise, the holders of
Series  A  Preferred  Stock  will  pay the  cost  of the  Second  Appraiser  (in
proportion  to the  number  of  shares  held by  each).  The  cost of the  Third
Appraiser will be paid half by the Corporation and half by the holders of Series
A Preferred Stock (in proportion to the number of Warrants held by each).

<PAGE>
                                       17


     "Holder" or "holder" means a registered holder of Series A Preferred Stock.

     "Intercreditor  Agreement" means the Subordination Agreement dated the date
of the Purchase  Agreement among LaSalle Business Credit,  Inc., Eureka I, L.P.,
the  Corporation,  and MTS  Packaging  Systems,  Inc., as in effect from time to
time.

     "Liquidation Junior Stock" is defined in Section 4(a).

     "Liquidity Event" means (A) the sale, lease, abandonment, transfer or other
disposition of all or substantially  all the stock or assets of the Corporation,
including  by  merger,   consolidation   or  otherwise,   (B)  the  dissolution,
liquidation or winding up of the Corporation,  (C) the occurrence of a Change of
Control, or (D) a Qualified Public Offering.

     "Market  Price" of a security  on (or  determined  as of) any day means the
average of the last  reported  sale  prices of such  security as reported by the
Nasdaq Stock Market or, if such security is listed on a securities exchange, the
average of the last  reported  sale prices of such  security  on such  exchange,
which shall be for consolidated  trading if applicable to such exchange,  or, if
not so reported,  or if no sale shall have occurred on a particular trading day,
the last reported bid price of such security,  in each case for the five trading
days immediately  before such day. If a security is publicly traded,  but not in
the Nasdaq  Stock Market or on a  securities  exchange,  its Market Price is the
average  of the  last  reported  bid  prices  of such  security  on the NASD OTC
bulletin  board for the five  trading  days  immediately  before  such day. If a
security is not reported on the NASD OTC bulletin board, its Market Price is its
Fair Market Value.

     "Notes"  means the  Corporation's  14%  Senior  Subordinated  Notes  issued
pursuant to the Purchase Agreement.

     "Person" means an individual,  corporation,  partnership, limited liability
company, trust or any other entity.

     "Purchase  Agreement" means the Securities  Purchase  Agreement,  dated the
date of the first issuance of Series A Preferred  Stock,  between Eureka I, L.P.
and the Corporation.

     "Qualified  Public  Offering"  means the first  issuance and sale after the
date  hereof by the  Corporation,  pursuant  to a  registration  statement  that
becomes  effective  under the Securities  Act, of securities  (other than senior
debt securities that are neither Convertible Securities nor issued as part of an
offering that includes  equity  securities or  Convertible  Securities)  for net
proceeds to the Corporation of $15,000,000 or more.

     "Securities  Act" means the  Securities  Act of 1933,  as amended,  and the
rules and regulations of the Commission promulgated thereunder,  all as the same
shall be in effect from time to time.

     "Series A Preferred Stock" is defined in Section 1.

<PAGE>
                                       18


     "Siegel Family" means (1) Todd E. Siegel, his siblings,  the descendants of
Todd  E.  Siegel  and his  siblings,  and the  spouses  of any of the  foregoing
persons;  and (2) any general or limited partnership  (including Jade Partners),
trust  (including  the  Siegel  Family  Trust)  or  other  entity,  all of whose
partners, beneficiaries or other owners are Persons described in clause (1).

     "Subsidiary"  means (1) any  partnership  in which the  Corporation  or any
Subsidiary is a general partner, (2) any Person in which the Corporation and its
Subsidiaries  collectively own a majority of the equity  interests,  and (3) any
Person of which  securities  having a majority of the  ordinary  voting power in
electing the board of directors or comparable  body are, at the time as of which
any  determination  is being made,  owned by the Corporation  either directly or
through one or more Subsidiaries.

     "Voting Securities" means securities entitled in ordinary  circumstances to
vote generally in the election of directors of the Corporation.


     "Warrants"  means the warrants to purchase  common stock of the Corporation
issued pursuant to the Purchase Agreement.

     "Wholly-Owned   Subsidiary"  means  any  Subsidiary,   all  of  the  equity
securities  of  which  are  owned by the  Corporation  or  another  Wholly-Owned
Subsidiary.

<PAGE>
                                       19


     IN WITNESS  WHEREOF,  this  Certificate  has been  executed  as of the date
specified below by the President of the Company indicated below:

Dated:  June _____, 2002


                                     MEDICAL TECHNOLOGY SYSTEMS, INC.


                                     By:________________________________
                                        Todd E. Siegel, President