AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                             TELETRAC HOLDINGS, INC.

         The undersigned being the duly elected Vice President and Secretary of
TELETRAC HOLDINGS, INC., a corporation organized and existing under the laws of
the State of Delaware (the "Corporation"), hereby certifies as follows:

         1. The name of the Corporation is Teletrac Holdings, Inc. The date of
the filing of the Corporation's original Certificate of Incorporation with the
Secretary of State of the State of Delaware was July 14, 1997.

         2. This Amended and Restated Certificate of Incorporation amends,
restates and integrates the provisions of the Certificate of Incorporation of
the Corporation as amended by a Certificate of Amendment filed with the
Secretary of State of the State of Delaware on July 31, 1997, and (i) was duly
adopted by the Board of Directors of the Corporation in accordance with the
provisions of Section 245 of the General Corporation Law of the State of
Delaware (the "DGCL"), (ii) was declared by the Board of Directors to be
advisable and in the best interests of the Corporation and was directed by the
Board of Directors to be submitted to and be considered by the stockholders of
the Corporation entitled to vote thereon for approval by the affirmative vote of
such stockholders in accordance with Section 242 of the DGCL and (iii) was duly
adopted by a stockholder consent in lieu of a meeting of the stockholders, with
the holders of eighty percent (80%) of the outstanding shares of the
Corporation's Series A Redeemable Convertible Participating Preferred Stock, par
value $.01 per share (the "Series A Preferred Stock"), in addition to the
holders of a majority of the outstanding shares of the Corporation's Class A
Common Stock, par value $.01 per share, and Series A Preferred Stock (on an as
converted basis) voting together as a single class, consenting to the adoption
of this Certificate of Incorporation in accordance with the provisions of
Sections 228 and 242 of the DGCL and the terms of the Certificate of
Incorporation, as amended, such holders being all of the holders of the
Corporation's capital stock entitled to vote thereon.

         3. The text of the Certificate of Incorporation, as amended, is hereby
amended and restated in its entirety to provide as herein set forth in full.

                                    ARTICLE I

         The name of the Corporation is Teletrac Holdings, Inc.

                                   ARTICLE II

         The address of the Corporation's registered office in the State of
Delaware is 1013 Centre Road in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is Corporation Service Company.


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                                   ARTICLE III

         The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the DGCL.


                                   ARTICLE IV

         The total number of shares of capital stock which the Corporation shall
have authority to issue is three million one hundred twenty-seven thousand eight
hundred sixty-five (3,127,865) shares, consisting of:

                  (1) one million five hundred thousand (1,500,000) shares of
Class A Common Stock, par value $.01 per share (the "Class A Common Stock");

                  (2) seventy thousand (70,000) shares of Class B Common Stock,
par value $.01 per share (the "Class B Common Stock");

                  (3) one hundred sixty-seven thousand three hundred
eighty-eight (167,388) shares of Series A Redeemable Convertible Participating
Preferred Stock, par value $.01 per share (the "Series A Preferred Stock");

                  (4) twenty three thousand eighty nine (23,089) shares of
Series A1 Redeemable Convertible Participating Preferred Stock, par value $.01
per share (the "First Series of Diluted Series A Preferred Stock");

                  (5) five hundred sixty seven thousand three hundred eighty
eight (567,388) shares of Undesignated Preferred Stock, par value $.01 per
share, with such designations, rights, preferences and privileges and such
qualifications, limitations and restrictions as the Board of Directors shall
determine from time to time pursuant to Part E of Article IV hereof (the
"Undesignated Preferred Stock");

                  (6) four hundred thousand (400,000) shares of Series B
Convertible Participating Preferred Stock, par value $.01 per share (the "Series
B Preferred Stock"); and

                  (7) four hundred thousand (400,000) shares of Redeemable
Preferred Stock, par value $.01 per share (the "Redeemable Preferred Stock").

         The Class A Common Stock and the Class B Common Stock are hereafter
collectively referred to as the "Common Stock." As described in Section 4(k) of
Part A hereof, outstanding shares of Series B Preferred Stock may, from time to
time, convert on a share-for-share basis to a new series of preferred stock
(each such new series, a "New Series of Diluted Series B Preferred Stock")
issued from the Undesignated Preferred Stock. All New Series of Diluted Series B
Preferred Stock are hereafter collectively referred to as the "Diluted Series B
Preferred Stock." The Series B Preferred Stock and the Diluted Series B
Preferred Stock are hereafter collectively


<PAGE>


referred to as the "Series B Stock." As described in Section 4(k) of Part C
hereof, outstanding shares of Series A Preferred Stock may, from time to time,
convert on a share-for-share basis to a new series of preferred stock (each such
new series, a "New Series of Diluted Series A Preferred Stock") issued from the
Undesignated Preferred Stock. The First Series of Diluted Series A Preferred
Stock and all New Series of Diluted Series A Preferred Stock are hereafter
collectively referred to as the "Diluted Series A Preferred Stock." The Series A
Preferred Stock and the Diluted Series A Preferred Stock are hereafter
collectively referred to as the "Series A Stock." The Series B Preferred Stock,
the Diluted Series B Preferred Stock, the Redeemable Preferred Stock, the Series
A Preferred Stock, the Diluted Series A Preferred Stock and the Undesignated
Preferred Stock, are hereafter collectively referred to as the "Preferred
Stock."

         The voting powers, designations, preferences, privileges and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions of each class of capital stock of the Corporation,
shall be as provided in this Article IV.

         A. SERIES B CONVERTIBLE PARTICIPATING PREFERRED STOCK

                  1.         Dividends.

                           (a) The holders of the Series B Preferred Stock shall
         be entitled to receive cumulative, compounding dividends ("Series B
         Cumulative Dividends") at a rate per annum of five percent (5%). Such
         dividends shall accrue on a daily basis, shall be cumulative from the
         date of original issue and shall be payable out of funds legally
         available therefor, when and as declared by the Board of Directors and,
         in any event, upon redemption or conversion of the Series B Preferred
         Stock or any liquidation of the Corpo ration. Each such Series B
         Cumulative Dividend shall be paid to the holders of record of shares of
         the Series B Preferred Stock as they appear on the stock register on
         the applicable record date, and in the event that Series B Cumulative
         Dividends are not paid as of any calendar year end, such dividends
         shall thereafter compound and accrue additional Series B Cumulative
         Dividends at the applicable dividend rate.

                           (b) For so long as any shares of Series B Preferred
         Stock are outstanding, no dividends shall be declared or paid or set
         apart for payment on any shares of any other class or classes of stock
         of the Corporation or any series thereof, nor shall any shares of
         capital stock be redeemed, purchased or otherwise acquired for any
         consideration (or any moneys to be paid to or made available for a
         sinking fund for the redemption of any such shares) by the Corporation
         (except (i) by conversion into or exchange for shares of the
         Corporation ranking junior to the Series B Preferred Stock as to
         dividends and upon liquidation, (ii) for conversion of any series of
         Preferred Stock to another series of Preferred Stock, (iii) for
         conversion of Series B Preferred Stock to Redeemable Preferred Stock
         and Common Stock, (iv) for redemption of Redeemable Preferred Stock
         under the terms set forth in Part B hereof, and (v) for repurchases of
         shares of Common Stock by the Corporation under employee stock plans
         and programs approved by the Board of Directors), provided that the
         repurchase price does not exceed the lesser of (A) the purchase price
         paid to the Company for such shares and (B) the fair



<PAGE>


         market value of such shares at the time of such repurchase (as
         determined by the Board of Directors in its sole discretion).

                           (c) In addition, the holders of the Series B
         Preferred Stock shall be entitled to receive out of funds legally
         available therefor, dividends (other than dividends paid in additional
         shares of Common) at the same rate as dividends are paid with respect
         to the Common Stock (treating each share of Series B Preferred Stock as
         being equal to the maximum number of shares of Common Stock into which
         each such share of Series B Preferred Stock could then be converted
         pursuant to the provisions of Section 4 hereof).

                  2.       Liquidation Events and Corporate Dispositions.

                           (a) Liquidation Events. In the event of any
         liquidation, dissolution or winding up of the Corporation, whether
         voluntary or involuntary (a "Liquidation Event"), the holders of the
         Series B Preferred Stock shall be entitled to receive, in cash, out of
         the assets of the Corporation available for distribution to
         stockholders: (i) before any payment shall be made to the holders of
         any other capital stock of the Corporation ranking on liquidation
         junior to the Series B Stock, an amount equal to $75.00 per share for
         each share of Series B Preferred Stock then held by such holder
         (adjusted for any stock split, combination, consolidation, or stock
         distributions or stock dividends with respect to such shares), plus a
         sum equal to all Series B Cumulative Dividends (whether or not earned
         or declared) on such shares of the Series B Preferred Stock to the date
         of final distribution (the "Series B Liquidation Preference Amount");
         and (ii) after the payment of the Series B Liquidation Preference
         Amount, the Series A Liquidation Preference Amount (as defined in
         Section 2(a) of Part C hereof) and any other amounts to be distributed
         to holders of capital stock of the Company in preference to the holders
         of the Common Stock, if any, upon any Liquidation Event, any assets
         remaining available for distribution shall be distributed ratably among
         the holders of the Common Stock, Series A Stock (if, and only if, such
         holders of Series A Stock participate in the distribution with the
         holders of Common Stock pursuant to Section 2(a) of Part C hereof) and
         the Series B Stock based upon the number of shares of Common Stock (i)
         then held by each holder of Common Stock, (ii) issuable upon conversion
         of the shares of Series A Stock held by a holder of Series A Stock
         pursuant to Section 4 of Part C hereof immediately prior to the
         occurrence of any such Liquidation Event, and (iii) issuable upon
         conversion of the shares of Series B Stock held by a holder of Series B
         Stock pursuant to Section 4 hereof immediately prior to the occurrence
         of any such Liquidation Event (the "Residual Series B Liquidation
         Amount" and, together with the Series B Liquidation Preference Amount,
         the "Total Series B Liquidation Amount"). If the assets and funds
         available for distribution among the holders of the Series B Preferred
         Stock shall be insufficient to permit the payment to the holders of the
         Series B Preferred Stock of the full Series B Liquidation Preference
         Amount, then the assets and funds of the Corporation legally available
         for distribution shall be distributed ratably among the holders of the
         Series B Preferred Stock and Diluted Series B Preferred Stock (if any).
         The provisions of this Section 2 shall not in any way limit the right
         of the holders of Series B Preferred Stock to elect to convert their
         shares



<PAGE>


         into Redeemable Preferred Stock and Common Stock pursuant to Section
         4(a) hereof prior to or in connection with any such Liquidation Event.

                           (b) Corporate Dispositions. In the event of (i) a
         merger or consoli dation of the Corporation with or into another
         corporation (with the result that less than a majority of the
         outstanding voting power of the surviving corporation is held by
         persons who were stockholders of the Corporation immediately prior to
         such event), (ii) the sale or transfer of all or substantially all of
         the properties and assets of the Corporation and its subsidiaries, or
         (iii) any purchase of shares of capital stock of the Corporation
         (either through a negotiated stock purchase or a tender for such
         shares) by a person or entity not affiliated with the Corporation or
         any of its stockholders, the effect of which is that such party
         beneficially owns at least a majority of the voting power of the
         outstanding shares of capital stock of the Corporation immediately
         after such purchase (each, a "Corporate Disposition"), the holders of
         Series B Preferred Stock shall be entitled to the application of the
         provisions of this Section 2(b) upon the occurrence of such Corporate
         Disposition unless the holders of not less than a majority of the
         outstanding shares of Series B Stock (with the Series B Preferred Stock
         and the Diluted Series B Preferred Stock, if any, voting together on an
         as-converted basis), shall have elected the application of the
         provisions of Section 4(j) hereof. In the event of a Corporate
         Disposition, then, as a part of and as a condition to the effectiveness
         of such Corporate Disposition (unless such holders shall have elected
         the application of the provisions of Section 4(j) hereof), the
         Corporation shall, on the effective date of such Corporate Disposition,
         redeem all of the outstanding shares of Series B Preferred Stock for an
         amount equal to the Total Series B Liquidation Amount (as calculated
         pursuant to Section 2(a) hereof). The provisions of this Section 2
         shall not in any way limit the rights of the holders of Series B
         Preferred Stock to elect the application of the provisions of Section
         4(j) hereof or Section 4(a) of Part B hereof in connection with a
         Corporate Disposition.

                           (c) Surrender of Certificates. On the effective date
         of any Corporate Disposition, the Corporation shall pay all cash and
         other consideration to which the holders of Series B Preferred Stock
         shall be entitled under this Section 2. Upon receipt of such payment,
         each holder of shares of Series B Preferred Stock shall surrender the
         certificate or certificates representing such shares, duly assigned or
         endorsed for transfer to the Corporation (or accompanied by duly
         executed stock powers relating thereto), at the principal executive
         office of the Corporation or the offices of the transfer agent for the
         Corporation, or shall notify the Corporation or any transfer agent that
         such certificates have been lost, stolen or destroyed and shall execute
         an affidavit or agreement reasonably satisfactory to the Corporation to
         indemnify the Corporation from any loss incurred by it in connection
         therewith (an "Affidavit of Loss"), and each surrendered certificate
         shall be canceled and retired.

                           (d) Notice. Prior to the occurrence of any
         Liquidation Event or Corporate Disposition, the Corporation will
         furnish each holder of Series B Preferred Stock notice in accordance
         with Section 7 hereof, together with a certificate prepared by the
         chief financial officer of the Corporation describing in detail the
         facts of such



<PAGE>


         Liquidation Event or Corporate Disposition, stating in reasonable
         detail the amount(s) per share of Series B Preferred Stock each holder
         of Series B Preferred Stock would receive pursuant to the provisions of
         Section 2(a) hereof and stating in reasonable detail the facts upon
         which such amount was determined and, in connection with any Corporate
         Disposition, describing in reasonable detail all material terms of such
         Corporate Disposition, including without limitation the consideration
         to be delivered in connection with such Corporate Disposition, the
         valuation of the Corporation at the time of such Corporate Disposition
         and the identities of the parties to the Corporate Disposition.

                  3.       Voting.

                           (a) General. Except as otherwise expressly provided
         herein or as required by law, the holder of each share of Series B
         Preferred Stock shall be entitled to vote on all matters submitted to a
         stockholder vote or consent. Each share of Series B Preferred Stock
         shall entitle the holder thereof to such number of votes per share as
         shall equal the maximum number of shares of Common Stock into which
         each share of Series B Preferred Stock is then convertible in
         accordance with the provisions of Section 4 hereof at the record date
         for the determination of stockholders entitled to vote on such matter
         or, if no record date is established, at the date such vote is taken or
         any written consent of stockholders is solicited. Except as otherwise
         expressly provided herein (including without limitation the provisions
         of Section 6 hereof) or as required by law, the holders of shares of
         Preferred Stock and the Common Stock shall vote together as a single
         class on all matters.

                           (b) Board of Directors. The holders of Preferred
         Stock shall be entitled to vote as a class (with all series of
         Preferred Stock voting together as a single class, on an as-converted
         basis) for the election of two (2) directors. The remainder of the
         directors shall be elected by the holders of the Preferred Stock and
         the Common Stock voting together as a single class. In any vote by the
         holders of the Preferred Stock each share of Series B Preferred Stock
         shall be entitled to the number of votes determined as provided in
         Section 3(a).

                  4.   Conversion Rights. The holders of Series B Preferred
                       Stock shall have conversion rights as follows:

                           (a) Conversion Upon Election of Holders. At any time,
         the holders of the shares of Series B Preferred Stock shall be
         entitled, by written election of not less than sixty-six and two-thirds
         percent (66 2/3%) of the outstanding shares of Series B Stock (with the
         Series B Preferred Stock and the Diluted Series B Preferred Stock, if
         any, voting together on an as-converted basis) and without the payment
         of any additional consideration, to cause all of the outstanding shares
         of Series B Preferred Stock to be automatically converted into (i) the
         number of shares of Class A Common Stock which results from dividing
         (A) the Conversion Value of the Series B Preferred Stock, which shall
         be $75.00 per share by (B) the Series B Conversion Price (as defined
         below) then in effect at the time of conversion and (ii) one share of
         Redeemable Preferred Stock per



<PAGE>


         share of Series B Preferred Stock. The "Series B Conversion Price"
         shall be $75.00 subject to adjustment, from time to time, as provided
         in Section 5 hereof. Upon the election to so convert in the manner and
         on the basis specified in this Section 4(a), all holders of the Series
         B Preferred Stock shall be deemed to have elected to voluntarily
         convert all outstanding shares of Series B Preferred Stock pursuant to
         this Section 4(a).

                           (b) Automatic Conversion. Each share of Series B
         Preferred Stock shall automatically be converted, without the payment
         of any additional consideration, into shares of Common Stock on the
         basis provided in Section 4(a) above (i) upon the closing of an
         underwritten public offering pursuant to an effective registration
         statement under Securities Act of 1933, as amended (the "Securities
         Act"), provided that (A) such registration statement covers the offer
         and sale of Common Stock of which the aggregate gross proceeds
         attributable to sales for the account of the Corporation exceed
         $30,000,000 at a price per share reflecting a pre-money valuation for
         the Corporation's equity of at least $180,000,000, and (B) either (x)
         all outstanding shares of Redeemable Preferred Stock are redeemed
         immediately upon and as of the closing of such offering or (y)
         contemporaneously with such offering cash in an amount sufficient to
         redeem all outstanding shares of Redeemable Preferred Stock is
         segregated and irrevocably held by the Corporation for payment to
         holders of Redeemable Preferred Stock in connection with the redemption
         thereof pursuant to Section 4 of Part B (a "Series B Qualified Public
         Offering"); or (ii) upon the written election of the holder or holders
         of not less than sixty-six and two-thirds percent (662/3%) percent of
         the outstanding Series B Stock (with the Series B Preferred Stock and
         the Diluted Series B Preferred Stock, if any, voting together on an
         as-converted basis), made in connection with the closing of an
         underwritten public offering pursuant to an effective registration
         statement under the Securities Act covering the offer and sale of
         Common Stock of the Corporation to the public which does not constitute
         a Series B Qualified Public Offering (a "Series B Non-Qualified Public
         Offer ing").

                           (c) Conversion Procedures. Upon conversion of the
         Series B Preferred Stock pursuant to Section 4(a) or Section 4(b)
         hereof, each holder of Series B Preferred Stock shall surrender the
         certificate or certificates representing its Series B Preferred Stock,
         duly assigned or endorsed for transfer to the Corporation (or
         accompanied by duly executed stock powers relating thereto), at the
         principal executive office of the Corporation or the offices of the
         transfer agent for the Series B Preferred Stock or such office or
         offices in the continental United States of an agent for conversion as
         may from time to time be designated by notice to the holders of the
         Series B Preferred Stock by the Corporation, or shall deliver an
         Affidavit of Loss with respect to such certificates. Upon surrender of
         a certificate representing Series B Preferred Stock for conversion, the
         Corporation shall issue and send by hand delivery, by courier or by
         first class mail (postage prepaid) to the holder thereof or to such
         holder's designee, at the address designated by such holder, a
         certificate or certificates for the number of shares of Common Stock
         and, if applicable, Redeemable Preferred Stock to which such holder
         shall be entitled upon conversion. The issuance and delivery of
         certificates for Common Stock and, if applicable, Redeemable Preferred
         Stock upon conversion of Series B Preferred



<PAGE>


         Stock will be made without charge to the holders of such shares for any
         issuance tax in respect thereof or other costs incurred by the
         Corporation in connection with such conver sion and the related
         issuance of such stock. Notwithstanding anything to the contrary set
         forth in this Section 4(c), in the event that the holders of shares of
         Series B Preferred Stock elect to convert such shares in connection
         with any Liquidation Event or Corporate Disposition, the holders shall
         deliver notice of such conversion no later than five (5) days before
         the occurrence of such Liquidation Event or the closing of such
         Corporate Disposition and such notice shall be effective as of, and
         shall in all cases be subject to, the occurrence of such Liquidation
         Event or closing of such Corporate Disposition. If such Liquidation
         Event or Corporate Disposition occurs, all outstanding shares of Series
         B Preferred Stock elected to be converted shall be deemed to have been
         converted into shares of Common Stock and Redeemable Preferred Stock
         immediately prior thereto, and the Corporation shall make appropriate
         provisions for the Common Stock issued upon such conversion to be
         treated on the same basis as all other Common Stock in such Liquidation
         Event or Corporate Disposition and for the Redeemable Preferred Stock
         to be treated in the manner set forth in Section 2 of Part B.

                           (d) Effective Date of Conversion. A conversion of
         Series B Preferred Stock shall be effective (i) in the case of
         conversion pursuant to Section 4(a) hereof, as of the date of receipt
         by the Corporation of such holders' written election to convert or such
         later date as shall be specified in such election and (ii) in the case
         of an automatic conversion pursuant to Section 4(b) hereof, immediately
         prior to the closing of the Series B Qualified Public Offering or a
         Series B Non-Qualified Public Offering, as the case may be. On and
         after the effective date of conversion, the person or persons entitled
         to receive the Common Stock and, if applicable, Redeemable Preferred
         Stock issuable upon such conversion shall, subject, in each case, to
         compliance with the conversion procedures in Section 4(c), be treated
         for all purposes as the record holder or holders of such shares of
         Common Stock and Redeemable Preferred Stock.

                           (e) No Impairment. The Corporation shall not, by
         amendment of its charter documents or through any reorganization,
         transfer of assets, consolidation, merger, 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 to be observed or
         performed hereunder by the Corporation but shall at all times in good
         faith assist in the carrying out of all the provisions of this Section
         4 and in the taking of all such action as may be necessary or
         appropriate in order to protect the conversion and other rights of the
         holders of the Series B Preferred Stock against impairment.

                           (f) Fractional Shares. The Corporation shall not be
         obligated to deliver to holders of Series B Preferred Stock any
         fractional share of Common Stock or Redeemable Preferred Stock issuable
         upon any conversion of such Series B Preferred Stock, but in lieu
         thereof may make a cash payment for fair market value in respect
         thereof in any manner permitted by law.



<PAGE>


                           (g) Reservation of Stock. The Corporation shall at
         all times reserve and keep available out of its authorized but unissued
         shares of Class A Common Stock and Redeemable Preferred Stock solely
         for the purpose of effecting the conversion of the shares of Series B
         Preferred Stock such number of its shares of Class A Common Stock and
         Redeemable Preferred Stock as shall from time to time be sufficient to
         effect the conversion of all outstanding shares of Series B Preferred
         Stock. If at any time the number of authorized but unissued shares of
         Class A Common Stock and Redeemable Preferred Stock shall not be
         sufficient to effect the conversion of all then outstanding shares of
         Series B Preferred Stock, the Corporation will take such corporate
         action as may be necessary to increase its authorized but unissued
         shares of Class A Common Stock and Redeemable Preferred Stock to such
         number of shares as shall be sufficient for such purpose. The
         Corporation shall prepare and shall use its best efforts to obtain and
         keep in force such governmental or regulatory permits or other
         authorizations as may be required by law, excluding permits or
         authorizations relating to registration under Federal or state
         securities laws, in order to enable the Corporation lawfully to issue
         and deliver to each holder of record of Series B Preferred Stock such
         number of shares of its Class A Common Stock and Redeemable Preferred
         Stock as shall from time to time be sufficient to effect the conversion
         of all Series B Preferred Stock then outstanding.

                           (h) Adjustments to Series B Conversion Price. The
         Series B Conversion Price in effect from time to time shall be subject
         to adjustment through the effective date of the conversion of all of
         the then outstanding Series B Preferred Stock and regardless of whether
         any shares of Series B Preferred Stock are then issued and outstanding
         as follows:

                                    (i) Stock Dividends, Subdivisions and
                  Combinations. Upon the issuance of additional shares of Common
                  Stock as a dividend or other distribution on outstanding
                  Common Stock, the subdivision of outstanding shares of Common
                  Stock into a greater number of shares of Common Stock, or the
                  combination of outstanding shares of Common Stock into a
                  smaller number of shares of Common Stock, the Series B
                  Conversion Price shall, simultaneously with the happening of
                  such dividend, subdivision or split, be adjusted by
                  multiplying the then effective Series B Conversion Price by a
                  fraction, the numerator of which shall be the number of shares
                  of Common Stock outstanding immediately prior to such event
                  and the denominator of which shall be the number of shares of
                  Common Stock outstanding immediately after such event. An
                  adjustment made pursuant to this Section 4(h)(i) shall be
                  given effect, upon payment of such a dividend or distribu
                  tion, as of the record date for the determination of
                  stockholders entitled to receive such dividend or distribution
                  (on a retroactive basis) and in the case of a subdivision or
                  combination shall become effective immediately as of the
                  effective date thereof.

                                    (ii) Sale of Common Stock. In the event the
                  Corporation shall at any time, or from time to time, issue,
                  sell or exchange any shares of Common Stock (including shares
                  held in the Corporation's treasury but excluding any shares



<PAGE>


                  of Common Stock issued (a) upon conversion of Preferred Stock
                  or (b) upon the exercise of Excluded Options (as defined in
                  Section 4(h)(iii) below)), for a consideration per share less
                  than the Series B Conversion Price in effect immedi ately
                  prior to the issuance, sale or exchange of such shares, then,
                  and thereafter successively upon each such issuance, sale or
                  exchange, the Series B Conversion Price in effect immediately
                  prior to the issuance, sale or exchange of such shares shall
                  forthwith be reduced to an amount determined by multiplying
                  such Series B Conversion Price by a fraction:

                                            (A) the numerator of which shall be
                           (i) the number of shares of Common Stock of all
                           classes outstanding immediately prior to the issuance
                           of such additional shares of Common Stock (excluding
                           treasury shares but including all shares of Common
                           Stock issuable upon conversion, exercise or exchange
                           of any outstanding Preferred Stock, options,
                           warrants, rights or convertible or exchangeable
                           securities), plus (ii) the number of shares of Common
                           Stock which the total aggregate consideration
                           received by the Corporation for the total number of
                           such additional shares of Common Stock so issued
                           would purchase at the Series B Conversion Price
                           (prior to adjustment), and

                                            (B) the denominator of which shall
                           be (i) the number of shares of Common Stock of all
                           classes outstanding immediately prior to the issuance
                           of such additional shares of Common Stock (excluding
                           treasury shares but including all shares of Common
                           Stock issuable upon conversion, exercise or exchange
                           of any outstanding Preferred Stock, options,
                           warrants, rights or convertible or exchangeable
                           securities), plus (ii) the number of such additional
                           shares of Common Stock so issued.

                                    (iii) Sale of Options, Rights or Convertible
                  Securities. In the event the Corporation shall at any time or
                  from time to time, issue options, warrants or rights to
                  subscribe for shares of Common Stock (other than any options
                  or warrants to purchase up to 133,042 shares of Common Stock
                  granted to officers, directors, employees, consultants,
                  advisors or agents of the Corporation granted or issued
                  pursuant to employee stock option plans and programs approved
                  by the compensation committee of the Corporation's Board of
                  Directors (collectively, the "Excluded Options")), or issue
                  any securities convertible into or exchangeable for shares of
                  Common Stock, for a consideration per share (determined by
                  dividing the Net Aggregate Consideration (as determined below)
                  by the aggregate number of shares of Common Stock that would
                  be issued if all such options, warrants, rights or convertible
                  or exchangeable securities were exercised, converted or
                  exchanged to the fullest extent permitted by their terms) less
                  than the Series B Conversion Price in effect immediately prior
                  to the issuance of such options, warrants, rights or
                  convertible or exchangeable securities, the Series B
                  Conversion Price in effect immediately prior to the issuance
                  of such options, warrants, rights or convertible or
                  exchangeable securities shall forthwith



<PAGE>


                  be reduced to an amount determined by multiplying such Series
                  B Conversion Price by a fraction:

                                            (A) the numerator of which shall be
                           (i) the number of shares of Common Stock of all
                           classes outstanding immediately prior to the issuance
                           of such options, rights or convertible or
                           exchangeable securities (excluding treasury shares
                           but including all shares of Common Stock issuable
                           upon conversion, exercise or exchange of any
                           outstanding Preferred Stock, options, warrants,
                           rights or convertible securities), plus (ii) the
                           number of shares of Common Stock which the total
                           amount of consideration received by the Corporation
                           for the issuance of such options, warrants, rights or
                           convertible or exchangeable securities plus the
                           minimum amount set forth in the terms of such
                           security as payable to the Corporation upon the
                           exercise, conversion or exchange thereof (the "Net
                           Aggregate Consideration") would purchase at the
                           Series B Conversion Price prior to adjustment, and

                                            (B) the denominator of which shall
                           be (i) the number of shares of Common Stock of all
                           classes outstanding immediately prior to the issuance
                           of such options, warrants, rights or convertible or
                           exchangeable securities (excluding treasury shares
                           but including all shares of Common Stock issuable
                           upon conversion, exercise or exchange of any
                           outstanding Preferred Stock, options, warrants,
                           rights or convertible or exchangeable securities),
                           plus (ii) the aggregate number of shares of Common
                           Stock that would be issued if all such options,
                           warrants, rights or convertible or exchangeable
                           securities were exercised, converted or exchanged.

                                    (iv) Expiration or Change in Price. If the
                  consideration per share provided for in any options, warrants
                  or rights to subscribe for shares of Common Stock or any
                  securities exchangeable for or convertible into shares of
                  Common Stock changes at any time, the Series B Conversion
                  Price in effect at the time of such change shall be readjusted
                  to the Series B Conversion Price which would have been in
                  effect at such time had such options, warrants rights or
                  convertible or exchangeable securities provided for such
                  changed consideration per share (determined as provided in
                  Section 4(h)(iii) hereof), at the time initially granted,
                  issued or sold; provided, that such adjustment of the Series B
                  Conversion Price will be made only as and to the extent that
                  the Series B Conversion Price effective upon such adjustment
                  remains less than or equal to the Series B Conversion Price
                  that would be in effect if such options, warrants, rights or
                  convertible or exchangeable securities had not been issued. No
                  adjustment of the Series B Conversion Price shall be made
                  under this Section 4 upon the issuance of any shares of Common
                  Stock which are issued pursuant to the exercise of any
                  options, warrants or other subscription or purchase rights or
                  pursuant to the exercise of any conversion or exchange rights
                  in any convertible or exchangeable securities if an adjustment
                  shall previously have been made upon the issuance of



<PAGE>


                  such options, warrants, rights or convertible or exchangeable
                  securities. Any adjustment of the Series B Conversion Price
                  shall be disregarded if, as, and when the rights to acquire
                  shares of Common Stock upon exercise or conversion of the
                  options, warrants, rights or convertible or exchangeable
                  securities which gave rise to such adjustment expire or are
                  canceled without having been exercised, so that the Series B
                  Conversion Price effective immediately upon such cancellation
                  or expiration shall be equal to the Series B Conversion Price
                  in effect at the time of the issuance of the expired or
                  canceled warrants, options, rights or convertible securities,
                  with such additional adjustments as would have been made to
                  that Series B Conversion Price had the expired or canceled
                  warrants, options, rights or convertible securities not been
                  issued.

                           (i) Other Adjustments. In the event the Corporation
         shall make or issue, or fix a record date for the determination of
         holders of Common Stock entitled to receive, a non-cash dividend or
         other distribution payable in securities of the Corporation other than
         shares of Common Stock, then and in each such event lawful and adequate
         provision shall be made so that the holders of Series B Preferred Stock
         shall receive upon conversion thereof in addition to the number of
         shares of Common Stock receivable thereupon, the number of securities
         of the Corporation which they would have received had their Series B
         Preferred Stock been converted into Common Stock on the date of such
         event and had they thereafter, during the period from the date of such
         event to and including the Conversion Date (as that term is hereafter
         defined), retained such securities receivable by them as aforesaid
         during such period.

                           If the Common Stock or Redeemable Preferred Stock
         issuable upon the conversion of the Series B Preferred Stock shall be
         changed into the same or different number of shares of any class or
         classes of stock, whether by reorganization, reclassification or
         otherwise (other than a subdivision or combination of shares or stock
         dividend provided for above, or a reorganization, merger, consolidation
         or sale of assets provided for elsewhere in this Section 4), then and
         in each such event the holder of each share of Series B Preferred Stock
         shall have the right thereafter to convert such share into the kind and
         amount of shares of stock and other securities and property receivable
         upon such reorganization, reclassification or other change, by holders
         of the number of shares of Common Stock or Redeemable Preferred Stock,
         as the case may be, into which such shares of Series B Preferred Stock
         might have been converted immediately prior to such reorganization,
         reclassification or change, all subject to further adjustment as
         provided herein.

                           (j) Mergers and Other Reorganizations. If (i) at any
         time or from time to time there shall be a Corporate Disposition, and
         (ii) the holders of a majority of the outstanding shares of Series B
         Stock (with the Series B Preferred Stock and the Diluted Series B
         Preferred Stock, if any, voting together on an as-converted basis)
         expressly elect in writing to have the provisions of this Section 4(j),
         and not the provisions of Section 2, apply to such transaction, then,
         as a part of and as a condition to the effectiveness of such
         reorganization, merger, consolidation or sale, lawful and adequate
         provision shall be made



<PAGE>


         so that the holders of the Series B Preferred Stock shall thereafter be
         entitled to receive upon conversion of the Series B Preferred Stock the
         number of shares of stock or other securities or property of the
         Corporation or of the successor corporation resulting from such merger
         or consolidation or sale, to which such holders would have been
         entitled upon such capital reorganization, merger, consolidation or
         sale had such holders converted their shares of Series B Preferred
         Stock into Redeemable Preferred Stock and Common Stock immediately
         prior to such capital reorganization, merger, consolidation, or sale.
         In any such case, appropriate provisions shall be made with respect to
         the rights of the holders of the Series B Preferred Stock after the
         reorganization, merger, consolidation or sale to the end that the
         provisions of this Section 4 (including without limitation provisions
         for adjustment of the Series B Conversion Price and the number of
         shares purchasable upon conversion of the Series B Preferred Stock)
         shall thereafter be applicable, as nearly as may be, with respect to
         any shares of stock, securities or assets to be deliverable thereafter
         upon the conversion of the Series B Preferred Stock. The provisions of
         this Section 4(j) shall not in any way limit the rights of the holders
         of Series B Preferred Stock under Sec tion 2 hereof if an election to
         have this Section 4(j) apply to such transaction is not made by such
         holders.

                           (k) Exceptions to Adjustment of Series B Conversion
         Price. Notwith standing anything herein to the contrary, in the event
         that (i) the Corporation completes an issuance of new securities (for
         purposes of this paragraph, the "New Securities") that results in an
         adjustment of the Series B Conversion Price pursuant to Section
         4(h)(ii) or Section 4(h)(iii) and which the holders of Series B
         Preferred Stock had a right to purchase pursuant to Article IV of a
         certain Stockholders Agreement dated October 19, 1998 by and among the
         Corporation and certain of its stockholders (the "Stockholders
         Agreement") and (ii) any holder of the Series B Preferred Stock does
         not purchase its pro rata share (as defined in Article IV of the
         Stockholders Agreement) of such New Securities, then such holder (a
         "Non-Participating Series B Holder") shall not be entitled to the
         benefits of Section 4(h)(ii) or Section 4(h)(iii), as applicable, with
         respect to any adjustment to the Series B Conversion Price resulting
         from that issuance or any future issuances of New Securities and all of
         such Non-Participating Holder's shares of Series B Preferred Stock
         shall immediately and automatically, without further action by such
         Non-Participating Series B Holder, be converted on a share-for-share
         basis to a New Series of Diluted Series B Preferred Stock, which shall
         be identical in all respects to the Series B Preferred Stock except
         that (A) the Series B Conversion Price of such New Series of Diluted
         Series B Preferred Stock shall be equal to the Series B Conversion
         Price of the Series B Preferred Stock in effect immediately prior to
         the issuance of such New Securities and (B) the terms of such New
         Series of Diluted Series B Preferred Stock shall not contain any
         provision for adjustment thereof similar to Section 4(h)(ii) or Section
         4(h)(iii) hereof. Prior to the issuance of any New Series of Diluted
         Series B Preferred Stock (x) the Board of Directors shall designate the
         number of shares and the New Series of Diluted Series B Preferred Stock
         to be issued in accordance with this Section 4(k) at that time and (y)
         the Corporation shall file all certificates and take all actions
         necessary to effectuate the foregoing. Any holder of Series B Preferred
         Stock whose shares are automatically converted pursuant to this Section
         4(k) into shares of a New



<PAGE>


         Series of Diluted Series B Preferred Stock shall surrender the
         certificate or certificates representing the Series B Preferred Stock
         so converted, duly assigned or endorsed for transfer to the Corporation
         (or accompanied by duly executed stock powers relating thereto), at the
         principal executive office of the Corporation or the offices of the
         transfer agent for the Series B Preferred Stock or such office or
         offices in the continental United States of an agent for conversion as
         may from time to time be designated by notice to the holders of the
         Series B Preferred Stock by the Corporation, or shall deliver an
         Affidavit of Loss with respect to such certificates. Upon surrender of
         a certificate representing Series B Preferred Stock for conversion
         under this Section 4(k), the Corporation shall issue and send by hand
         delivery, by courier or by first class mail (postage prepaid) to the
         holder thereof or to such holder's designee, at the address designated
         by such holder, a certificate or certificates for the number of shares
         of the New Series of Diluted Series B Preferred Stock to which such
         holder shall be entitled upon such automatic conversion. The issuance
         and delivery of certificates for a New Series of Diluted Series B
         Preferred Stock upon conversion of Series B Preferred Stock will be
         made without charge to the holders of such shares for any issuance tax
         in respect thereof or other costs incurred by the Corporation in
         connection with such conversion and the related issuance of such stock.
         Each share of Series B Preferred Stock converted pursuant to this
         Section 4(k) shall be canceled and retired as provided in Section 7
         hereof. In the event that any Non-Participat ing Series B Holder fails
         to surrender its certificates as provided hereunder, such certificate
         shall nonetheless represent only the right to receive a New Series of
         Diluted Series B Preferred Stock, as provided hereunder.

                  Notwithstanding anything herein to the contrary, in no event
shall the Corporation's issuance and sale of Additional Series B Preferred
Shares (as defined in that certain Stock Purchase Agreement dated as of October
19, 1998, by and among the Corporation and the purchasers of Series B Preferred
Stock (the "Purchase Agreement")), pursuant to the Purchase Agreement constitute
an issuance of New Securities hereunder.

                           (l) Waiver. The holder or holders of not less than
         sixty-six and two-thirds percent (662/3%) of the outstanding Series B
         Preferred Stock may, by written notice to the Corporation, waive any
         adjustment to the Series B Conversion Price required under this Section
         4.

                           (m) Notices. In each case of an adjustment or
         readjustment of the Series B Conversion Price, the Corporation will
         furnish each holder of Series B Preferred Stock with a certificate,
         prepared by the chief financial officer of the Corporation, showing
         such adjustment or readjustment, and stating in detail the facts upon
         which such adjustment or readjustment is based.

                  5.       Redemption.

                           (a) Prior to February 1, 2008. The Corporation may,
         at any time prior to February 1, 2008 redeem each share of Series B
         Preferred Stock then outstanding for a cash price equal to the sum of
         (i) the Series B Liquidation Preference Amount as of the



<PAGE>


         date of redemption, plus (ii) an amount equal to all Series B
         Cumulative Dividends (whether or not earned or declared) on such shares
         of the Series B Preferred Stock to February 1, 2008.

                           (b) On or After February 1, 2008. At any time on or
         after February 1, 2008, at the election of the holders of a majority of
         the outstanding Series B Stock (with the Series B Preferred Stock and
         the Diluted Series B Preferred Stock, if any, voting together on an
         as-converted basis), the Corporation shall redeem each share of Series
         B Preferred Stock then outstanding for a cash price equal to the
         greater of (i) the Series B Liquidation Preference Amount or (ii) the
         fair market value of the Series B Preferred Stock as of the date of
         redemption as determined in accordance with Section 5(f) below,
         together with all shares of Diluted Series B Preferred Stock in
         accordance with the terms thereof.

                           (c) Series B Redemption Price; Dividends. Any date
         upon which a redemption shall occur in accordance with Section 5(a) or
         Section 5(b) hereof shall be referred to as a "Series B Redemption
         Date." The redemption price for each share of Redeemable Preferred
         Stock redeemed pursuant to Section 5(a) or Section 5(b) hereof shall be
         referred to as the Redeemable Redemption Price. If at the Series B
         Redemption Date shares of Series B Preferred Stock are unable to be
         redeemed (as contemplated by Section 5(e) below), in addition to the
         Series B Redemption Price the holders of Series B Preferred Stock shall
         be entitled to any interest accrued pursuant to Section 5(e). The
         Series B Redemption Price shall be payable in cash in immediately
         available funds on the Series B Redemption Date. Until the full Series
         B Redemption Price, including any interest thereon, has been paid in
         cash for all shares of Series B Preferred Stock redeemed as of the
         applicable Series B Redemption Date: (A) no dividend whatsoever shall
         be paid or declared, and no distribution shall be made, on any capital
         stock of the Corporation; and (B) no shares of capital stock of the
         Corporation (other than the Series B Stock in accordance with this
         Section 5) shall be purchased, redeemed or acquired by the Corporation
         and no monies shall be paid into or set aside or made available for a
         sinking fund for the purchase, redemption or acquisition thereof.

                           (d) Termination of Rights. From and after the Series
         B Redemption Date, unless there shall have been a default in payment or
         tender by the Corporation of the Series B Redemption Price, all rights
         of the holders with respect to such redeemed shares of Series B
         Preferred Stock (except the right to receive the Series B Redemption
         Price in accordance with the terms hereof upon surrender of their
         certificate) shall cease and such shares shall not thereafter be
         transferred on the books of the Corporation or be deemed to be
         outstanding for any purpose whatsoever.

                           (e) Insufficient Funds. If the funds of the
         Corporation legally available for redemption of shares of Series B
         Preferred Stock and shares of Diluted Series B Preferred Stock (if any)
         to be redeemed on the Series B Redemption Date are insufficient to
         redeem the total number of shares of Series B Preferred Stock and
         Diluted Series B Preferred Stock (if any), the Corporation shall use
         those funds which are legally available



<PAGE>


         to redeem the maximum possible number of such shares ratably among the
         holders of shares of Series B Stock to be redeemed. At any time
         thereafter when additional funds of the Corporation are legally
         available for the redemption of shares of Series B Preferred Stock and
         shares of Diluted Series B Preferred Stock (if any) (before any payment
         shall be made to the holders of any capital stock of the Corporation
         ranking junior to the Series B Stock), such funds will immediately be
         used to redeem the balance of the shares which the Corporation has
         become obligated to redeem on the Series B Redemption Date but which it
         has not redeemed at the Series B Redemption Price together with any
         accrued interest thereon as provided below. If any shares of Series B
         Preferred Stock are not redeemed because the Corporation failed to pay
         or tender to pay the aggregate Series B Redemption Price on all
         outstanding shares of Series B Stock, (i) all shares which have not
         been redeemed shall remain outstanding and entitled to all the rights
         and preferences provided herein, and the Corporation shall pay interest
         on the unpaid portion of the Series B Redemption Price for the
         unredeemed portion at a per annum rate equal to twenty percent (20%) or
         the maximum rate of interest permitted under applicable law, whichever
         is less and (ii) if such Series B Redemption Price shall remain unpaid
         for a period of nine (9) months, then the Board of Directors shall take
         all actions that it deems necessary to fund the Series B Redemption
         Price, including, without limitation, the sale or liquidation of the
         Corporation.

                           (f)      Fair Market Value Determination.

                                    (i) If the Corporation's Common Stock is
                  publicly traded at the Series B Redemption Date, the Fair
                  Market Value of each share of Series B Preferred Stock shall
                  equal the product of the number of shares of Common Stock into
                  which each share of the Series B Preferred Stock may then be
                  converted multiplied by the average closing price for the
                  Corporation's Common Stock for the thirty (30) trading days
                  immediately preceding the Series B Redemption Date.

                                    (ii) If the Corporation's Common Stock is
                  not publicly traded on the Series B Redemption Date, the Fair
                  Market Value shall be determined in accordance with the
                  following provisions. Within fifteen (15) days after the
                  redemption election by the Corporation or by the holders of
                  Series B Preferred Stock pursuant to Section 5, as the case
                  may be, the Corporation shall deliver to each holder of Series
                  B Preferred Stock its estimate of the Fair Market Value of the
                  Series B Preferred Stock to be redeemed. If the holders of
                  sixty-six and two-thirds percent (662/3%) of the outstanding
                  shares of the Series B Stock (with the Series B Preferred
                  Stock and the Diluted Series B Preferred Stock, if any, voting
                  together as a single class on an as-converted basis), do not
                  object in writing to the Corporation's estimate of the Fair
                  Market Value of the Series B Preferred Stock, within fifteen
                  (15) days after receipt of the Corporation's written notice
                  thereof, such estimate shall be the Fair Market Value for
                  purposes of determining the Series B Redemption Price of the
                  Series B Preferred Stock. If the holders of sixty-six and
                  two-thirds percent (662/3%) of the outstanding shares of the
                  Series B Stock (with the Series B Preferred Stock and the
                  Diluted Series B Preferred Stock, if



<PAGE>


                  any, voting together as a single class on an as-converted
                  basis) do timely object to the Corporation's estimate of Fair
                  Market Value, the Corporation and such holders shall seek for
                  a ten-day period thereafter to negotiate the Fair Market Value
                  in good faith. If the Corporation and the holders of sixty-six
                  and two-thirds percent (662/3%) of the outstanding shares of
                  the Series B Stock (with the Series B Preferred Stock and the
                  Diluted Series B Preferred Stock, if any, voting together as a
                  single class on an as-converted basis) are unable to agree
                  upon such Fair Market Value by the end of such period, each of
                  the Corporation and the holders (acting at the direction of a
                  majority of the outstanding shares of Series B Stock (with the
                  Series B Preferred Stock and the Diluted Series B Preferred
                  Stock, if any, voting together as a single class on an
                  as-converted basis) shall, within ten (10) days thereafter,
                  select an unaffiliated investment banking firm of nationally
                  recognized standing in the telecommunications industry to
                  appraise the Fair Market Value of the Series B Preferred
                  Stock. Each such firm will deliver its appraisal of the Fair
                  Market Value within fifteen (15) days thereafter, and if the
                  lower appraisal is at least ninety percent (90%) of the higher
                  appraisal, the arithmetic mean of the two shall be the Fair
                  Market Value. If the two appraisals vary by more than ten
                  percent (10%), the two firms shall promptly select a third
                  investment banking firm of nationally recognized standing in
                  the telecommunica tions industry. Such third firm shall,
                  within ten (10) days thereafter, deliver its appraisal of the
                  Fair Market Value of the Series B Preferred Stock, the two
                  appraisals which are closest together in value shall be
                  averaged and such amount shall be the Fair Market Value for
                  purposes of determining the Series B Redemption Price.

                                    (iii) When determining the Fair Market Value
                  of the Series B Preferred Stock, the appraisers shall
                  consider, among other factors, book value, re placement value,
                  comparable public company valuations, earnings, the value of
                  future cash flows of the Corporation and its subsidiaries as
                  an on-going enterprise and the sale of various combinations of
                  the individual assets of the Corporation and its subsidiaries
                  as well as a sale of the Corporation and its subsidiaries as a
                  whole, choosing the manner of sale which maximizes the
                  aggregate value of the assets being sold, and shall make no
                  deduction, discount or other subtraction what soever for the
                  possible minority status of any such holder or for any lack of
                  marketability of any shares of stock held by such holder or
                  any restrictions on transfer thereof. All costs of the
                  appraisals under this Section 5(d) shall be borne by the
                  Corporation.

                  6.       Restrictions and Limitations. So long as the Series B
                           Preferred Stock remains outstanding:

                           (a) The Corporation will not, without the affirmative
         vote or written consent of the holders of a majority of the issued and
         outstanding shares of Common Stock and Preferred Stock, voting as a
         single class on an as converted basis:




<PAGE>


                                    (i) Authorize or issue, or obligate itself
                  to issue, any shares of Common Stock (other than pursuant to
                  the exercise of stock options or other rights granted under
                  the 1995 Stock Option Plan, 1996 Stock Option Plan and 1998
                  Stock Option Plan, or upon conversion of the Preferred Stock);

                                    (ii) Authorize any merger or consolidation
                  of the Corporation with or into any other corporation,
                  partnership or entity (with respect to which less than a
                  majority of the outstanding voting power of such surviving
                  corporation is held by stockholders of the Corporation
                  immediately prior to such event) or permit the sale of all or
                  any material portion of the capital stock or assets of the
                  Corporation (other than sales in the ordinary course of
                  business and consistent with past practices); or

                                    (iii) Incur, create, assume, become or be
                  liable in any manner with respect to, or permit to exist, any
                  new or additional indebtedness or liability (other than up to
                  $30 million in connection with the Corporation's revolving
                  credit facilities with Banque Paribas and Fleet National
                  Bank).

                           (b) The Corporation will not, without the affirmative
         vote or written consent of holders of sixty-six and two-thirds percent
         (662/3%) of the issued and outstanding shares of Common Stock and
         Preferred Stock, voting as a single class on an as converted basis:

                                    (i) Authorize or issue, or obligate itself
                  to issue, any equity securities at an effective per share
                  price which is less than $173.25 (which price shall be
                  appropriately adjusted for stock splits, stock dividends,
                  recapitalizations and the like), other than any Additional
                  Series B Preferred Shares issued pursuant to the Purchase
                  Agreement;

                                    (ii) Authorize or issue a class or series of
                  stock having rights equal or senior to the Series B Preferred
                  Stock, or a new class or series of Preferred Stock, other than
                  any Additional Series B Preferred Shares issued pursuant to
                  the Purchase Agreement;

                                    (iii) Authorize any acquisition, merger or
                  consolidation of assets or stock of another corporation,
                  partnership or entity in exchange for shares of equity
                  securities of the Corporation which results in dilution to the
                  existing stockholders, on a fully diluted, as converted basis,
                  in excess of fifteen percent (15%); or

                                    (iv) Authorize or permit the reorganization,
                  liquidation, dissolution or winding up of the Corporation.




<PAGE>


                           (c) The Corporation will not, without the affirmative
         vote of the holders of a majority of the outstanding shares of Series B
         Preferred Stock voting as a separate class:

                                    (i) Redeem, purchase or otherwise acquire
                  for value (or pay into or set aside for a sinking fund for
                  such purpose) any shares of Common Stock or of any other class
                  of capital stock of the Corporation or any of the
                  Corporation's outstanding options, warrants or convertible or
                  exchangeable securities, except for repurchases of shares of
                  Common Stock at cost by the Company under employee stock plans
                  and programs approved by the Board of Directors;

                                    (ii) Increase or decrease (other than by
                  conversion as permitted hereby) the total number of authorized
                  shares of Series B Preferred Stock; or

                                    (iii) Amend the charter documents of the
                  Company so as to adversely affect the rights of the holders of
                  Series B Preferred Stock with respect to dividends,
                  liquidation preferences, redemption or any other preference,
                  power, right or privilege.

                  7.       No Reissuance of Series B Preferred Stock. No share
or shares of the Series B Preferred Stock acquired by the Corporation
by reason of redemption, purchase, conversion (including, without limitation,
conversion of Series B Preferred Stock into Undesignated Preferred Stock under
Section 4(k) hereof) 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 the Series B Preferred Stock accordingly.

                  8.       Notices of Record Date. In the event (i) the
Corporation establishes a record date to determine the holders of any class or
securities who are entitled to receive any dividend or other distribution, or
(ii) there occurs any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation, and any transfer of all or
substantially all of the assets of the Corporation to any other corporation, or
any other entity or person, or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the Corporation shall mail to each
holder of Series B Preferred Stock at least twenty (20) days prior to the record
date specified therein, a notice specifying (a) the date of such record date for
the purpose of such dividend or distribution and a description of such dividend
or distribution, (b) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective, and (c) the time, if any, that is to
be fixed, as to when the holders of record of Preferred Stock and Common Stock
(or other securities) shall be entitled to exchange their shares of Preferred
Stock and Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up.



<PAGE>


                  9.       Other Rights. Except as otherwise provided in the 
charter documents of the Corporation, as amended, shares of Series B Preferred
Stock and shares of Common Stock shall be identical in all respects (each share
of Series B Preferred Stock having equivalent rights to the maximum number of
shares of Common Stock into which it is then convertible), shall have the same
powers, preferences and rights, without preference of any such class or share
over any other such class or share, and shall be treated as a single class of
stock for all purposes.

                  10.      Miscellaneous.

                           (a) All notices referred to herein shall be in
         writing, and all notices hereunder shall be deemed to have been given
         upon the earlier of delivery thereof by hand delivery, by courier, or
         by standard form of telecommunication, addressed: (i) if to the
         Corporation, to its principal executive office (Attention: President)
         and to the transfer agent, if any, for the Series B Preferred Stock or
         other agent of the Corporation designated as permitted hereby, (ii) if
         to any holder of the Preferred Stock or Common Stock, as the case may
         be, to such holder at the address of such holder as listed in the stock
         record books of the Corporation (which may include the records of any
         transfer agent for the Preferred Stock or Common Stock, as the case may
         be) or (iii) to such other address as the Corporation or any such
         holder, as the case may be, shall have designated by notice similarly
         given.

                           (b) The Corporation may appoint, and from time to
         time discharge and change, a transfer agent of the Series B Preferred
         Stock. Upon any such appointment or discharge of a transfer agent, the
         Corporation shall send notice thereof by hand delivery, by courier, by
         standard form of telecommunication or by first class mail (postage
         prepaid), to each holder of record of Series B Preferred Stock.

                           (c) The Board of Directors is hereby authorized to
         designate and issue additional series of Diluted Series B Preferred
         Stock in accordance with Section 4(k) hereof. The terms of such
         additional series of Diluted Series B Preferred Stock shall be
         identical to the terms of the Series B Preferred Stock at the time of
         such designation, except that (i) each additional series of Diluted
         Series B Preferred Stock shall not have provisions similar to Section
         4(h)(ii) or Section 4(h)(iii) above and (ii) the Board of Directors
         shall designate the conversion price for such additional series of
         Diluted Series B Preferred Stock which shall be equal to the conversion
         price of the Series B Preferred Stock being converted pursuant to
         Section 4(k) in effect immediately prior to the issuance of the New
         Securities (as defined in Section 4(k) hereof).


         B.  REDEEMABLE PREFERRED STOCK

         The relative rights, preferences, restrictions and other matters
relating to the Redeemable Preferred Stock are as follows:




<PAGE>


                  1.       Dividends.

                           (a) The holders of the Redeemable Preferred Stock
         shall be entitled to receive cumulative dividends on the Redeemable
         Preferred Stock in cash, at the rate per annum of five percent (5%) of
         the Redeemable Base Liquidation Amount (as defined in Section 2 below)
         per share of Redeemable Preferred Stock (a "Redeemable Cumulative
         Dividend"). Such dividends will accrue commencing as of the date of
         issuance of the Redeemable Preferred Stock and be cumulative, to the
         extent unpaid, whether or not they have been declared and whether or
         not there are profits, surplus or other funds of the Corporation
         legally available for the payment of dividends; provided, however, that
         in the event that shares of Redeemable Preferred Stock are unable to be
         redeemed and continue to be outstanding in accordance with Section 4(c)
         hereof, such shares shall continue to be entitled to dividends through
         such date and interest as provided in Section 4(c) hereof until the
         date on which such shares are actually redeemed by the Corporation.
         Redeemable Cumulative Dividends shall become due and payable with
         respect to any share of Redeemable Preferred Stock as provided in
         Sections 2 and 4 hereof.

                           (b) For so long as any shares of Redeemable Preferred
         Stock are outstanding, no dividends shall be declared or paid or set
         apart for payment on any shares of any other class or classes of stock
         of the Corporation or any series thereof ranking junior to the
         Redeemable Preferred Stock, nor shall any shares of capital stock be
         redeemed, purchased or otherwise acquired for any consideration (or any
         moneys to be paid to or made available for a sinking fund for the
         redemption of any such shares) by the Corporation (except (i) by
         conversion into or exchange for shares of the Corporation ranking
         junior to the Series A Preferred Stock as to dividends and upon
         liquidation, (ii) for conversion of any series of Preferred Stock to
         another series of Preferred Stock, (iii) for conversion of Series B
         Preferred Stock to Redeemable Preferred Stock and Common Stock, (iv)
         for redemption of Redeemable Preferred Stock under the terms set forth
         herein, and (v) for repurchases of shares of Common Stock by the
         Corporation under employee stock plans and programs approved by the
         Board of Directors), provided that the repurchase price does not exceed
         the lesser of (A) the purchase price paid to the Company for such
         shares and (B) the fair market value of such shares at the time of such
         repurchase (as determined by the Board of Directors in its sole
         discretion).

                           (c) All numbers relating to the calculation of
         dividends pursuant to this Section 1 shall be subject to equitable
         adjustment in the event of any stock split, combination,
         reorganization, recapitalization, reclassification or other similar
         event involving a change in the Redeemable Preferred Stock.

                  2.       Liquidation Event. Upon any Liquidation Event, each 
holder of Redeemable Preferred Stock shall be entitled to receive, in cash, out
of the assets of the Corporation available for distribution to stockholders
before any payment shall be made to the holders of any other capital stock of
the Corporation ranking on liquidation junior to the Redeemable Preferred Stock,
an amount equal to $75.00 per share for each share of Redeemable Preferred Stock
then held by such holder (adjusted for any stock split, combination,
consolidation,


<PAGE>


or stock distributions or stock dividends with respect to such shares), plus an
amount equal to the sum of (A) all unpaid Series B Cumulative Dividends on
shares of Series B Preferred Stock which converted into the Redeemable Preferred
Stock and (B) all Redeemable Cumulative Dividends (whether or not earned or
declared) on such shares of Redeemable Preferred Stock to the date of final
distribution (the "Redeemable Base Liquidation Amount"); such holder shall also
be entitled to an amount equal to any interest accrued pursuant to Section 4(c)
hereof. If the assets and funds available for distribution among the holders of
the Redeemable Preferred Stock shall be insufficient to permit the payment to
the holders of the Redeemable Preferred Stock of the full Redeemable Base
Liquidation Amount, then the assets and funds of the Corporation legally
available for distribution shall be distributed ratably among the holders of the
Redeemable Pre ferred Stock.

                  3.       Voting. Except as otherwise expressly provided herein
or as required by law, the holders of Redeemable Preferred Stock shall not be
entitled to vote on any matters submitted to a stockholder vote or consent.

                  4.       Redemption. The holders of Redeemable Preferred Stock
shall have redemption rights as follows:

                           (a)      Redemption Events.

                                    (i) Automatic Redemption. Immediately upon
                  and as of, and in all cases subject to, the closing of a
                  Series B Qualified Public Offering, the Corporation shall
                  redeem all (and not less than all) of the outstanding shares
                  of Redeemable Preferred Stock at the Redeemable Redemption
                  Price specified in Section 4(b) below.

                                    (ii) On or After February 1, 2008. Upon the
                  election of the holders of not less than sixty-six and
                  two-thirds percent (66 2/3%) of the outstanding Redeemable
                  Preferred Stock (or the holders of not less than sixty-six and
                  two thirds percent (66 2/3%) of the outstanding Series B Stock
                  proposing to convert the same in order to effect a redemption
                  of the Redeemable Preferred Stock received upon such
                  conversion hereunder) made at any time on or after February 1,
                  2008 the Corporation shall redeem all (and not less than all,
                  other than pursuant to Section 4(c) below) of the outstanding
                  shares of Redeemable Preferred Stock. The foregoing election
                  shall be made by such holders giving the Corporation and each
                  of the other holders of Redeemable Preferred Stock (or Series
                  B Stock, as applicable) not less than fifteen (15) days prior
                  written notice which notice shall set forth the date for such
                  redemption.

                                    (iii) Upon a Corporate Disposition. Upon the
                  election of the holders of not less than sixty-six and
                  two-thirds percent (66 2/3%) of the outstanding Redeemable
                  Preferred Stock (or Series B Stock, as applicable, proposing
                  to convert the same in order to effect a redemption of the
                  Redeemable Preferred Stock received upon such conversion
                  hereunder), the Corporation shall



<PAGE>


                  redeem all (and not less than all, other than pursuant to
                  Section 4(c) below) of the outstanding shares of Redeemable
                  Preferred Stock upon the occurrence of a Corporate
                  Disposition. The foregoing election shall be made by such
                  holders giving the Corporation and each other holder of
                  Redeemable Preferred Stock (or Series B Stock, as applicable)
                  not less that five (5) days prior written notice, which notice
                  shall set forth the date for such redemption.

                           (b) Redemption Date and Redemption Price. Upon the
         election of the holders of not less than sixty-six and two-thirds
         percent (66 2/3%) of the outstanding Redeemable Preferred Stock to
         cause the Corporation to redeem the Redeemable Preferred Stock pursuant
         to Section 4(a)(ii) or (iii) above, all holders of Redeemable Preferred
         Stock shall be deemed to have elected to cause the Redeemable Preferred
         Stock to be so redeemed. Any date upon which a redemption shall occur
         in accordance with Section 4(a) shall be referred to as a "Redeemable
         Redemption Date." The redemption price for each share of Redeemable
         Preferred Stock redeemed pursuant to this Section 4 shall be the
         Redeemable Base Liquidation Amount (the "Redeemable Redemption Price");
         provided, however, that if at a Redeemable Redemption Date shares of
         Redeemable Preferred Stock are unable to be redeemed (as contemplated
         by Section 4(c) below), in addition to the Redeemable Redemption Price
         the holders of Redeemable Preferred Stock shall be entitled to any
         interest accrued pursuant to Section 4(c). The Redeemable Redemption
         Price shall be payable in cash in immediately available funds on the
         Redeemable Redemption Date. Until the full Redeemable Redemption Price,
         including any interest thereon, has been paid in cash for all shares of
         Redeemable Preferred Stock redeemed as of the applicable Redeemable
         Redemption Date: (A) no dividend whatsoever shall be paid or declared,
         and no distribution shall be made, on any capital stock of the
         Corporation; and (B) no shares of capital stock of the Corporation
         (other than the Redeemable Preferred Stock in accordance with this
         Section 5) shall be purchased, redeemed or acquired by the Corporation
         and no monies shall be paid into or set aside or made available for a
         sinking fund for the purchase, redemption or acquisition thereof.

                           (c) Insufficient Funds. If the funds of the
         Corporation legally available for redemption of shares of Redeemable
         Preferred Stock to be redeemed on the Redeemable Redemption Date are
         insufficient to redeem the total number of shares of Redeemable
         Preferred Stock, the Corporation shall use those funds which are
         legally available to redeem the maximum possible number of such shares
         ratably among the holders of such shares to be redeemed. At any time
         thereafter when additional funds of the Corporation are legally
         available for the redemption of shares of Redeemable Preferred Stock,
         such funds will immediately be used to redeem the balance of the shares
         which the Corporation has become obligated to redeem on the Redeemable
         Redemption Date but which it has not redeemed at the Redeemable
         Redemption Price together with any accrued interest thereon as provided
         below. If any shares of Redeemable Preferred Stock are not redeemed
         because the Corporation failed to pay or tender to pay the aggregate
         Redeemable Redemption Price on all outstanding shares of Redeemable
         Preferred Stock, (i) all shares which have not been redeemed shall
         remain outstanding and entitled to all the rights and preferences
         provided herein, and the Corporation shall pay interest on the



<PAGE>


         unpaid portion of the Redeemable Redemption Price for the unredeemed
         portion at a per annum rate equal to twenty percent (20%) or the
         maximum rate of interest permitted under applicable law, whichever is
         less and (ii) if such Redeemable Redemption Price shall remain unpaid
         for a period of nine (9) months, then the Board of Directors shall take
         all actions that it deems necessary to fund the Redeemable Redemption
         Price, including, without limitation, the sale or liquidation of the
         Corporation.

                           (d) Surrender of Certificates. Each holder of shares
         of Redeemable Preferred Stock to be redeemed shall surrender the
         certificate or certificates representing such shares to the
         Corporation, duly assigned or endorsed for transfer (or accompanied by
         duly executed stock powers relating thereto), or shall deliver an
         Affidavit of Loss with respect to such certificates at the principal
         executive office of the Corporation or the office of the transfer agent
         for the Redeemable Preferred Stock or such office or offices in the
         continental United States of an agent for redemption as may from time
         to time be designated by notice to the holders of Redeemable Preferred
         Stock (or the holders of Series B Stock, as applicable), and each
         surrendered certificate shall be canceled and retired. Upon receipt of
         the certificate or certificates, as the case may be, or an Affidavit of
         Loss, the Corporation shall pay the applicable Redeemable Redemption
         Price by certified check or wire transfer.

                  6.       Restrictions. So long as any shares of Redeemable 
Preferred Stock remains outstanding, the provisions of Section 6 of Part A shall
apply to all shares of Redeemable Preferred Stock as if such shares were shares
of Series B Preferred Stock.

                  7.       No Reissuance of Redeemable Preferred Stock. No share
or shares of the Redeemable 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.

                  8.       Notices of Record Date. In the event (i) the 
Corporation establishes a record date to determine the holders of any class of
securities who are entitled to receive any dividend or other distribution, or
(ii) there occurs any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation, and any transfer of all or
substantially all of the assets of the Corporation to any other corporation, or
any other entity or person, or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the Corporation shall mail to each
holder of Redeemable Preferred Stock at least twenty (20) days prior to the
record date specified therein, a notice specifying (a) the date of such record
date for the purpose of such dividend or distribution and a description of such
dividend or distribution, (b) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective, and (c) the time, if any, that is to
be fixed, as to when the holders of record of Preferred Stock and Common Stock
(or other securities) shall be entitled to exchange their shares of Preferred
Stock and Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up.



<PAGE>


                  9.       Miscellaneous.

                           (a) All notices referred to herein shall be in
         writing, and all notices hereunder shall be deemed to have been given
         upon the earlier of delivery thereof by hand delivery, by courier, or
         by standard form of telecommunication, addressed: (i) if to the
         Corporation, to its principal executive office (Attention: President)
         and to the transfer agent, if any, for the Redeemable Preferred Stock
         or other agent of the Corporation designated as permitted hereby, (ii)
         if to any holder of the Preferred Stock or Common Stock, as the case
         may be, to such holder at the address of such holder as listed in the
         stock record books of the Corporation (which may include the records of
         any transfer agent for the Preferred Stock or Common Stock, as the case
         may be) or (iii) to such other address as the Corporation or any such
         holder, as the case may be, shall have designated by notice similarly
         given.

                           (b) The Corporation may appoint, and from time to
         time discharge and change, a transfer agent of the Redeemable Preferred
         Stock. Upon any such appointment or discharge of a transfer agent, the
         Corporation shall send notice thereof by hand delivery, by courier, by
         standard form of telecommunication or by first class mail (postage
         prepaid), to each holder of record of Redeemable Preferred Stock.


         C.  SERIES A REDEEMABLE CONVERTIBLE PARTICIPATING PREFERRED STOCK

                  1.       Dividends.

                           (a) The holders of the Series A Preferred Stock shall
         be entitled to receive cumulative, compounding dividends ("Series A
         Cumulative Dividends") at a rate per annum of fifteen percent (15%).
         Such dividends shall accrue on a daily basis, shall be cumulative from
         July 31, 1997 and shall be payable out of funds legally available
         therefor, when and as declared by the Board of Directors and, in any
         event, upon redemption of the Series A Preferred Stock or any
         liquidation of the Corporation. Each such Series A Cumulative Dividend
         shall be paid to the holders of record of shares of the Series A
         Preferred Stock as they appear on the stock register on the applicable
         record date, and in the event that Series A Cumulative Dividends are
         not paid as of any calendar year end, such dividends shall thereafter
         compound and accrue additional Series A Cumulative Divi dends at the
         applicable dividend rate.

                           (b) For so long as any shares of Series A Preferred
         Stock are outstanding, no dividends shall be declared or paid or set
         apart for payment on any shares of any other class or classes of stock
         of the Corporation or any series thereof (other than the Series B
         Preferred Stock, the Diluted Series B Preferred Stock and the
         Redeemable Preferred Stock), nor shall any shares of capital stock be
         redeemed, purchased or otherwise acquired for any consideration (or any
         moneys to be paid to or made available for a sinking fund for the
         redemption of any such shares) by the Corporation (except (i) by



<PAGE>


         conversion into or exchange for shares of the Corporation ranking
         junior to the Series A Preferred Stock as to dividends and upon
         liquidation, (ii) for conversion of any series of Preferred Stock to
         another series of Preferred Stock, (iii) for conversion of Series B
         Preferred Stock to Redeemable Preferred Stock and Common Stock, (iv)
         for redemption of Redeemable Preferred Stock under the terms set forth
         herein, and (v) for repurchases of shares of Common Stock by the
         Corporation under employee stock plans and programs approved by the
         Board of Directors), provided that the repurchase price does not exceed
         the lesser of (A) the purchase price paid to the Company for such
         shares and (B) the fair market value of such shares at the time of such
         repurchase (as determined by the Board of Directors in its sole
         discretion).

                           (c) In addition, the holders of the Series A
         Preferred Stock shall be entitled to receive out of funds legally
         available therefor, dividends (other than dividends paid in additional
         shares of Common Stock) at the same rate as dividends are paid with
         respect to the Common Stock (treating each share of Series A Preferred
         Stock as being equal to the maximum number of shares of Common Stock
         into which each such share of Series A Preferred Stock could then be
         converted pursuant to the provisions of Section 4 hereof).

                  2.       Liquidation Events and Corporate Dispositions.

                           (a) Liquidation Events. In the event of any
         Liquidation Event, the holders of the Series A Preferred Stock shall be
         entitled to receive, in cash, out of the assets of the Corporation
         available for distribution to stockholders after the payment in full of
         (i) the Series B Liquidation Preference Amount due to the holders of
         Series B Stock, or (ii) the Redeemable Base Liquidation Amount (as
         defined in Section 2 of Part B) due to the holders of Redeemable
         Preferred Stock, but before any payment shall be made to the holders of
         any other capital stock of the Corporation junior to the Series A
         Preferred Stock, on a pro rata basis with the holders of Diluted Series
         A Preferred Stock (based on the ratio which the shares of Series A
         Preferred Stock or Diluted Series A Preferred Stock of each holder
         bears to all the issued and outstanding shares of Series A Preferred
         Stock and Diluted Series A Preferred Stock), an amount equal to $190.86
         per share for each share of Series A Preferred Stock then held by such
         holder (adjusted for any stock split, combination, consolidation, or
         stock distributions or stock dividends with respect to such shares),
         plus a sum equal to all Series A Cumulative Dividends (whether or not
         earned or declared) on such shares of the Series A Preferred Stock to
         the date of final distribution (the "Series A Liquidation Preference
         Amount"); provided, however, that if upon any such Liquidation Event,
         the holders of the outstanding shares of Series A Preferred Stock would
         receive more than the Series A Liquidation Preference Amount if their
         shares were converted into Common Stock pursuant to the provisions of
         Section 4 hereof immediately prior to the record date for distributions
         in connection with such Liquidation Event, then the holders of the
         Series A Preferred Stock shall be entitled to receive, in lieu of the
         Series A Liquidation Preference Amount, in cash, out of the assets of
         the Corporation available for distribution to stockholders after the
         payment in full of (i) the Series B Liquidation Preference Amount due
         to the holders of Series B Preferred Stock, and (ii) the



<PAGE>


         Redeemable Base Liquidation Amount due to the holders of Redeemable
         Preferred Stock, but before any payment shall be made to the holders of
         any other capital stock of the Corporation junior to the Series A
         Preferred Stock, pro rata with the holders of Diluted Series A
         Preferred Stock (on an as-converted basis), an amount equal to the
         ratable share of the assets and funds available for distribution to
         holders of Common Stock and Series B Preferred Stock, with such
         distributions to be made as if each share of Series A Preferred Stock
         had been converted into the maximum number of shares of Common Stock
         issuable upon the conversion of such share of Series A Preferred Stock
         immediately prior to such Liquidation Event. If the assets and funds
         available for distribution among the holders of the Series A Preferred
         Stock shall be insufficient to permit the payment to the holders of the
         Series A Preferred Stock of the full Series A Liquidation Preference
         Amount, then the assets and funds of the Corporation legally available
         for distribution (after the payment in full of the Series B Liquidation
         Preference Amount due to the holders of Series B Stock, and the
         Redeemable Base Liquidation Amount due to the holders of Redeemable
         Preferred Stock) shall be distributed ratably among the holders of the
         Series A Preferred Stock and the Diluted Series A Preferred Stock
         (based on the ratio which the shares of Series A Preferred Stock or
         Diluted Series A Preferred Stock of each holder bears to all the issued
         and outstanding shares of Series A Preferred Stock and Diluted Series A
         Preferred Stock). The provisions of this Section 2 shall not in any way
         limit the right of the holders of Series A Preferred Stock to elect to
         convert their shares into Common Stock pursuant to Section 4 prior to
         or in connection with any such Liquidation Event.

                           (b) In the event of a Corporate Disposition, the
         holders of Series A Preferred Stock shall be entitled to the
         application of the provisions of this Section 2(b) upon the occurrence
         of such Corporate Disposition unless the holders of not less than
         sixty-six and two-thirds percent (662/3%) of the outstanding shares of
         Series A Preferred Stock and Diluted Series A Preferred Stock, voting
         together as a single class on an as-converted basis, shall have elected
         the application of the provisions of Section 4(j) hereof. In the event
         of a Corporate Disposition, then, as a part of and as a condition to
         the effectiveness of such Corporate Disposition (unless such holders
         shall have elected the application of the provisions of Section 4(j)
         hereof), the Corporation shall (after the payment in full of the Total
         Series B Liquidation Amount due to the holders of Series B Stock and
         the Redeemable Redemption Price due to the holders of Redeemable
         Preferred Stock), on the effective date of such Corporate Disposition,
         redeem all of the outstanding shares of Series A Preferred Stock for an
         amount equal to the Series A Liquidation Preference Amount; provided,
         however, that if upon any such Corporate Disposition, the holders of
         the outstanding shares of Series A Preferred Stock would receive more
         than the Series A Liquidation Preference Amount if their shares were
         converted into Common Stock pursuant to the provisions of Section 4
         hereof immediately prior to such Corporate Disposition, then the
         Corporation shall, on the effective date of such Corporate Disposition,
         redeem all of the outstanding shares of Series A Preferred Stock and
         the holders of the Series A Preferred Stock shall be entitled to
         receive (after the payment in full of the Total Series B Liquidation
         Amount due to the holders of Series B Stock and the Redeemable
         Redemption Price due to the holders of Redeemable Preferred Stock), an
         amount equal to the ratable share of the proceeds of such Corporate
         Disposition available



<PAGE>


         for distribution to holders of Common Stock, with such distributions to
         be made as if each share of Series A Preferred Stock had been converted
         into the maximum number of shares of Common Stock issuable upon the
         conversion of such share of Series A Preferred Stock immediately prior
         to such Corporate Disposition. Notwithstanding anything to the contrary
         set forth in this Section 2, in the event of a Corporate Disposition on
         or before December 4, 1998, the holders of the Series A Preferred Stock
         shall be entitled to receive, in lieu of the Series A Liquidation
         Preference Amount, in cash, out of the assets of the Corporation
         available for distribution to stockholders after the payment in full of
         (i) the Series B Liquidation Preference Amount due to the holders of
         Series B Preferred Stock, and (ii) the Redeemable Liquidation
         Preference Amount due to the holders of Redeemable Preferred Stock, but
         before any payment shall be made to the holders of any other capital
         stock of the Corporation junior to the Series A Preferred Stock, pro
         rata with the holders of Diluted Series A Preferred Stock, an amount
         equal to $259.88 per share of Series A Preferred Stock (adjusted for
         any stock split, combination, consolidation, or stock distributions or
         stock dividends with respect to such share), unless the holders of not
         less than sixty-six and two-thirds percent (662/3%) of the outstanding
         shares of Series A Preferred Stock and Diluted Series A Preferred
         Stock, voting together as a single class on an as-converted basis,
         expressly waive in writing the application of the provisions of this
         Section 2 in connection with such Corporate Disposition. The provisions
         of this Section 2 shall not in any way limit the rights of the holders
         of Series A Preferred Stock to elect the application of the provisions
         of Section 4(j) hereof in connection with a Corporate Dispo sition.

                           (c) Surrender of Certificates. On the effective date
         of any Corporate Disposition, the Corporation shall pay all cash and
         other consideration to which the holders of Series A Preferred Stock
         shall be entitled under this Section 2. Upon receipt of such payment,
         each holder of shares of Series A Preferred Stock shall surrender the
         certificate or certificates representing such shares, duly assigned or
         endorsed for transfer to the Corporation (or accompanied by duly
         executed stock powers relating thereto), at the principal executive
         office of the Corporation or the offices of the transfer agent for the
         Corporation, or shall notify the Corporation or any transfer agent that
         such certificates have been lost, stolen or destroyed and shall execute
         an Affidavit of Loss, and each surrendered certificate shall be
         canceled and retired.

                           (d) Notice. Prior to the occurrence of any
         Liquidation Event or Corporate Disposition, the Corporation will
         furnish each holder of Series A Preferred Stock notice in accordance
         with Section 7 hereof, together with a certificate prepared by the
         chief financial officer of the Corporation describing in detail the
         facts of such Liquidation Event or Corporate Disposition, stating in
         reasonable detail the amount(s) per share of Series A Preferred Stock
         each holder of Series A Preferred Stock would receive pursuant to the
         provisions of Section 2(a) hereof and stating in reasonable detail the
         facts upon which such amount was determined and, in connection with any
         Corporate Disposition, describing in reasonable detail all material
         terms of such Corporate Disposition, including without limitation the
         consideration to be delivered in connection


<PAGE>


         with such Corporate Disposition, the valuation of the Corporation at
         the time of such Corporate Disposition and the identities of the
         parties to the Corporate Disposition.

                  3.       Voting.

                           (a) General. Except as otherwise expressly provided
         herein or as required by law, the holder of each share of Series A
         Preferred Stock shall be entitled to vote on all matters submitted to a
         stockholder vote or consent. Each share of Series A Preferred Stock
         shall entitle the holder thereof to such number of votes per share as
         shall equal the maximum number of shares of Common Stock into which
         each share of Series A Preferred Stock is then convertible in
         accordance with the provisions of Section 4 hereof at the record date
         for the determination of stockholders entitled to vote on such matter
         or, if no record date is established, at the date such vote is taken or
         any written consent of stockholders is solicited. Except as otherwise
         expressly provided herein (including without limitation the provisions
         of Section 6 hereof) or as required by law, the holders of shares of
         Preferred Stock and the Common Stock shall vote together as a single
         class on all matters.

                           (b) Board of Directors. The holders of Preferred
         Stock shall be entitled to vote as a class (with all series of
         Preferred Stock voting together as a single class, on an as-converted
         basis) for the election of two (2) directors. The remainder of the
         directors shall be elected by the holders of the Preferred Stock and
         the Common Stock voting together as a single class. In any vote by the
         holders of the Preferred Stock each share of Series A Preferred Stock
         shall be entitled to the number of votes determined as provided in
         Section 3(a).

                  4. Conversion Rights. The holders of Series A Preferred Stock
shall have conversion rights as follows:

                           (a) Voluntary Conversion. At any time, each holder of
         shares of Series A Preferred Stock shall be entitled, without the
         payment of any additional consideration, to cause any or all
         outstanding shares of Series A Preferred Stock held by such holder to
         be converted into the number of fully-paid and nonassessable shares of
         Class A Common Stock which results from dividing the Series A
         Conversion Price (as defined below) then in effect at the time of
         conversion into the Conversion Value of the Series A Preferred Stock,
         which shall be $173.25 per share. The "Series A Conversion Price" shall
         be $173 .25 per share of Common Stock, subject to adjustment from time
         to time as provided in this Section 4. If a holder of Series A
         Preferred Stock elects to convert under this Sec tion 4(a), such holder
         shall deliver to the Corporation a written notice of conversion
         specifying (i) the number of shares of Series A Preferred Stock to be
         converted, (ii) the name or names in which such holder wishes the
         certificate or certificates for Common Stock and for any Series A
         Preferred Stock not to be so converted to be issued and (iii) the
         address to which such holder wishes delivery to be made of such new
         certificates to be issued upon such conversion.




<PAGE>


                           (b) Automatic Conversion. Each share of Series A
         Preferred Stock shall automatically be converted, without the payment
         of any additional consideration, into shares of Common Stock on the
         basis provided in Section 4(a) above (i) upon the closing of an
         underwritten public offering pursuant to an effective registration
         statement under the Securities Act, covering the offer and sale of
         Common Stock of the Corporation to the public with a per share value at
         least equal to the greater of $300.00 per share (subject to adjustment
         for stock splits, stock dividends, recapitalizations and the like) and
         the then Series A Liquidation Preference Amount per share (a "Series A
         Qualified Public Offer ing"), or (ii) upon the written election of the
         holder or holders of not less than sixty-six and two-thirds percent
         (662/3%) percent of the outstanding Series A Preferred Stock and
         Diluted Series A Preferred Stock, voting together as a single class, on
         an as-converted basis, made in connection with the closing of an
         underwritten public offering pursuant to an effective registration
         statement under the Securities Act covering the offer and sale of
         Common Stock of the Corporation to the public which does not constitute
         a Series A Qualified Public Offering (a "Series A Non-Qualified Public
         Offering").

                           (c) Conversion Procedures. Any holder of Series A
         Preferred Stock converting such shares into shares of Common Stock, or
         whose shares are automatically converted pursuant to Section 4(b),
         shall surrender the certificate or certificates representing the Series
         A Preferred Stock being converted, duly assigned or endorsed for
         transfer to the Corporation (or accompanied by duly executed stock
         powers relating thereto), at the principal executive office of the
         Corporation or the offices of the transfer agent for the Series A
         Preferred Stock or such office or offices in the continental United
         States of an agent for conversion as may from time to time be
         designated by notice to the holders of the Series A Preferred Stock by
         the Corporation, or shall deliver an Affidavit of Loss with respect to
         such certificates. Upon surrender of a certificate representing Series
         A Preferred Stock for conversion, the Corporation shall issue and send
         by hand delivery, by courier or by first class mail (postage prepaid)
         to the holder thereof or to such holder's designee, at the address
         designated by such holder, a certificate or certificates for the number
         of shares of Common Stock to which such holder shall be entitled upon
         conver sion. In the event that there shall have been surrendered a
         certificate or certificates representing Series A Preferred Stock, only
         part of which are to be converted, the Corporation shall issue and send
         to such holder or such holder's designee, in the manner set forth in
         the preceding sentence, a new certificate or certificates representing
         the number of shares of Series A Preferred Stock which shall not have
         been converted. The issuance and delivery of certificates for Common
         Stock upon conversion of Series A Preferred Stock will be made without
         charge to the holders of such shares for any issuance tax in respect
         thereof or other costs incurred by the Corporation in connection with
         such conversion and the related issuance of such stock.

                           (d) Effective Date of Conversion. The issuance by the
         Corporation of shares of Common Stock upon a conversion of Series A
         Preferred Stock into shares of Common Stock at the option of the
         holder(s) thereof pursuant to Section 4(a) or by operation of Section
         4(b) hereof shall be effective as of the surrender of the certificate
         or certificates for the Series A Preferred Stock to be converted, duly
         assigned or endorsed



<PAGE>


         for transfer to the Corporation (or accompanied by duly executed stock
         powers relating thereto) or delivery of an Affidavit of Loss with
         respect to such certificates. The issuance by the Corporation of shares
         of Common Stock upon a conversion of Series A Preferred Stock into
         Common Stock pursuant to Section 4(b) hereof upon a Series A Qualified
         Public Offering or a Series A Non-Qualified Public Offering shall be
         deemed to be effective immediately prior to the closing of such Series
         A Qualified Public Offering or Series A Non-Qualified Public Offering.
         On and after the effective date of conversion, the person or persons
         entitled to receive the Common Stock issuable upon such conversion
         shall be treated for all purposes as the record holder or holders of
         such shares of Common Stock.

                           (e) No Impairment. The Corporation shall not, by
         amendment of its charter documents or through any reorganization,
         transfer of assets, consolidation, merger, 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 to be observed or
         performed hereunder by the Corporation but shall at all times in good
         faith assist in the carrying out of all the provisions of this Section
         4 and in the taking of all such action as may be necessary or
         appropriate in order to protect the conversion and other rights of the
         holders of the Series A Preferred Stock against impairment.

                           (f) Fractional Shares. The Corporation shall not be
         obligated to deliver to holders of Series A Preferred Stock any
         fractional share of Common Stock issuable upon any conversion of such
         Series A Preferred Stock, but in lieu thereof may make a cash payment
         for fair market value in respect thereof in any manner permitted by
         law.

                           (g) Reservation of Common Stock. The Corporation
         shall at all times reserve and keep available out of its authorized and
         unissued Class A Common Stock, solely for issuance upon the conversion
         of Series A Preferred Stock as herein provided, free from any
         preemptive rights or other obligations, such number of shares of Class
         A Common Stock as shall from time to time be issuable upon the
         conversion of all the Series A Preferred Stock then outstanding. The
         Corporation shall prepare and shall use its best efforts to obtain and
         keep in force such governmental or regulatory permits or other
         authorizations as may be required by law, excluding permits or
         authorizations relating to registration under Federal or state
         securities laws, in order to enable the Corporation lawfully to issue
         and deliver to each holder of record of Series A Preferred Stock such
         number of shares of its Common Stock as shall from time to time be
         sufficient to effect the conversion of all Series A Preferred Stock
         then outstanding and convertible into shares of Class A Common Stock.

                           (h) Adjustments to Series A Conversion Price. The
         Series A Conver sion Price in effect from time to time shall be subject
         to adjustment through the effective date of the conversion of all of
         the then outstanding Series A Preferred Stock and regardless of whether
         any shares of Series A Preferred Stock are then issued and outstanding
         as follows:



<PAGE>


                                    (i) Stock Dividends, Subdivisions and
                  Combinations. Upon the issuance of additional shares of Common
                  Stock as a dividend or other distribution on outstanding
                  Common Stock, the subdivision of outstanding shares of Common
                  Stock into a greater number of shares of Common Stock, or the
                  combination of outstanding shares of Common Stock into a
                  smaller number of shares of Common Stock, the Series A
                  Conversion Price shall, simultaneously with the happening of
                  such dividend, subdivision or split, be adjusted by
                  multiplying the then effective Series A Conversion Price by a
                  fraction, the numerator of which shall be the number of shares
                  of Common Stock outstanding immediately prior to such event
                  and the denominator of which shall be the number of shares of
                  Common Stock outstanding immediately after such event. An
                  adjustment made pursuant to this Section 4(h)(i) shall be
                  given effect, upon payment of such a dividend or distribu
                  tion, as of the record date for the determination of
                  stockholders entitled to receive such dividend or distribution
                  (on a retroactive basis) and in the case of a subdivision or
                  combination shall become effective immediately as of the
                  effective date thereof.

                                    (ii) Sale of Common Stock. In the event the
                  Corporation shall at any time, or from time to time, issue,
                  sell or exchange any shares of Common Stock (including shares
                  held in the Corporation's treasury but excluding any shares of
                  Common Stock issued (a) upon conversion of Preferred Stock, or
                  (b) upon the exercise of Excluded Options), for a
                  consideration per share less than the Series A Conversion
                  Price in effect immediately prior to the issuance, sale or
                  exchange of such shares, then, and thereafter successively
                  upon each such issuance, sale or exchange, the Series A
                  Conversion Price in effect immediately prior to the issuance,
                  sale or exchange of such shares shall forthwith be reduced to
                  an amount determined by multiplying such Series A Conversion
                  Price by a fraction:

                                            (A) the numerator of which shall be
                           (i) the number of shares of Common Stock of all
                           classes outstanding immediately prior to the issuance
                           of such additional shares of Common Stock (excluding
                           treasury shares but including all shares of Common
                           Stock issuable upon conversion, exercise or exchange
                           of any outstanding Preferred Stock, options,
                           warrants, rights or convertible or exchangeable
                           securities), plus (ii) the number of shares of Common
                           Stock which the total aggregate consideration
                           received by the Corporation for the total number of
                           such additional shares of Common Stock so issued
                           would purchase at the Series A Conversion Price
                           (prior to adjustment), and

                                            (B) the denominator of which shall
                           be (i) the number of shares of Common Stock of all
                           classes outstanding immediately prior to the issuance
                           of such additional shares of Common Stock (excluding
                           treasury shares but including all shares of Common
                           Stock issuable upon conversion, exercise or exchange
                           of any outstanding Preferred Stock, options,



<PAGE>


                           warrants, rights or convertible or exchangeable
                           securities), plus (ii) the number of such additional
                           shares of Common Stock so issued.

                                    (iii) Sale of Options, Rights or Convertible
                  Securities. In the event the Corporation shall at any time or
                  from time to time, issue options, warrants or rights to
                  subscribe for shares of Common Stock (other than the Excluded
                  Options), or issue any securities convertible into or
                  exchangeable for shares of Common Stock, for a consideration
                  per share (determined by dividing the Net Aggregate
                  Consideration (as determined below) by the aggregate number of
                  shares of Common Stock that would be issued if all such
                  options, warrants, rights or convertible or exchangeable
                  securities were exercised, converted or exchanged to the
                  fullest extent permitted by their terms) less than the Series
                  A Conversion Price in effect immediately prior to the issuance
                  of such options, warrants, rights or convertible or
                  exchangeable securities, the Series A Conversion Price in
                  effect immediately prior to the issuance of such options,
                  warrants, rights or convertible or exchangeable securities
                  shall forthwith be reduced to an amount determined by
                  multiplying such Series A Conversion Price by a fraction:

                                            (A) the numerator of which shall be
                           (i) the number of shares of Common Stock of all
                           classes outstanding immediately prior to the issuance
                           of such options, rights or convertible or
                           exchangeable securities (excluding treasury shares
                           but including all shares of Common Stock issuable
                           upon conversion, exercise or exchange of any
                           outstanding Preferred Stock, options, warrants,
                           rights or convertible securities), plus (ii) the
                           number of shares of Common Stock which the total
                           amount of consideration received by the Corporation
                           for the issuance of such options, warrants, rights or
                           convertible or exchangeable securities plus the
                           minimum amount set forth in the terms of such
                           security as payable to the Corporation upon the
                           exercise, conversion or exchange thereof (the "Net
                           Aggregate Consideration") would purchase at the
                           Series A Conversion Price prior to adjustment, and

                                            (B) the denominator of which shall
                           be (i) the number of shares of Common Stock of all
                           classes outstanding immediately prior to the issuance
                           of such options, warrants, rights or convertible or
                           exchangeable securities (excluding treasury shares
                           but including all shares of Common Stock issuable
                           upon conversion, exercise or exchange of any
                           outstanding Preferred Stock, options, warrants,
                           rights or convertible or exchangeable securities),
                           plus (ii) the aggregate number of shares of Common
                           Stock that would be issued if all such options,
                           warrants, rights or convertible or exchangeable
                           securities were exercised, converted or exchanged.

                                    (iv) Expiration or Change in Price. If the
                  consideration per share provided for in any options, warrants
                  or rights to subscribe for shares of Common Stock or any
                  securities exchangeable for or convertible into shares of


<PAGE>


                  Common Stock changes at any time, the Series A Conversion
                  Price in effect at the time of such change shall be readjusted
                  to the Series A Conversion Price which would have been in
                  effect at such time had such options, warrants rights or
                  convertible or exchangeable securities provided for such
                  changed consideration per share (determined as provided in
                  Section 4(h)(iii) hereof), at the time initially granted,
                  issued or sold; provided, that such adjustment of the Series A
                  Conversion Price will be made only as and to the extent that
                  the Series A Conversion Price effective upon such adjustment
                  remains less than or equal to the Series A Conversion Price
                  that would be in effect if such options, warrants, rights or
                  convertible or exchangeable securities had not been issued. No
                  adjustment of the Series A Conversion Price shall be made
                  under this Section 4 upon the issuance of any shares of Common
                  Stock which are issued pursuant to the exercise of any
                  options, warrants or other subscription or purchase rights or
                  pursuant to the exercise of any conversion or exchange rights
                  in any convertible or exchangeable securities if an adjustment
                  shall previously have been made upon the issuance of such
                  options, warrants, rights or convertible or exchangeable
                  securities. Any adjustment of the Series A Conversion Price
                  shall be disregarded if, as, and when the rights to acquire
                  shares of Common Stock upon exercise or conversion of the
                  options, warrants, rights or convertible or exchangeable
                  securities which gave rise to such adjustment expire or are
                  canceled without having been exercised, so that the Series A
                  Conversion Price effective immediately upon such cancellation
                  or expiration shall be equal to the Series A Conversion Price
                  in effect at the time of the issuance of the expired or
                  canceled warrants, options, rights or convertible securities,
                  with such additional adjustments as would have been made to
                  that Series A Conversion Price had the expired or canceled
                  warrants, options, rights or convertible securities not been
                  issued.

                           (i) Other Adjustments. In the event the Corporation
         shall make or issue, or fix a record date for the determination of
         holders of Common Stock entitled to receive, a non-cash dividend or
         other distribution payable in securities of the Corporation other than
         shares of Common Stock, then and in each such event lawful and adequate
         provision shall be made so that the holders of Series A Preferred Stock
         shall receive upon conversion thereof in addition to the number of
         shares of Common Stock receivable thereupon, the number of securities
         of the Corporation which they would have received had their Series A
         Preferred Stock been converted into Common Stock on the date of such
         event and had they thereafter, during the period from the date of such
         event to and including the Conversion Date (as that term is hereafter
         defined), retained such securities receivable by them as aforesaid
         during such period.

                           If the Common Stock issuable upon the conversion of
         the Series A Preferred Stock shall be changed into the same or
         different number of shares of any class or classes of stock, whether by
         reorganization, reclassification or otherwise (other than a subdivision
         or combination of shares or stock dividend provided for above, or a
         reorganization, merger, consolidation or sale of assets provided for
         elsewhere in this Section 4), then and in each such event the holder of
         each share of Series A Preferred



<PAGE>


         Stock shall have the right thereafter to convert such share into the
         kind and amount of shares of stock and other securities and property
         receivable upon such reorganization, reclassification or other change,
         by holders of the number of shares of Common Stock into which such
         shares of Series A Preferred Stock might have been converted
         immediately prior to such reorganization, reclassification or change,
         all subject to further adjustment as provided herein.

                           (j) Mergers and Other Reorganizations. If (i) at any
         time or from time to time there shall be a Corporate Disposition and
         (ii) the holders of sixty-six and two-thirds percent (662/3%) of the
         outstanding shares of Series A Preferred Stock and Diluted Series A
         Preferred Stock, voting together as a single class on an as-converted
         basis, ex pressly elect in writing to have the provisions of this
         Section 4(j), and not the provisions of Section 2, apply to such
         transaction, then, as a part of and as a condition to the effectiveness
         of such reorganization, merger, consolidation or sale, lawful and
         adequate provision shall be made so that the holders of the Series A
         Preferred Stock shall thereafter be entitled to receive upon conversion
         of the Series A Preferred Stock the number of shares of stock or other
         securities or property of the Corporation or of the successor
         corporation resulting from such merger or consolidation or sale, to
         which such holders would have been entitled upon such capital
         reorganization, merger, consolidation or sale had such holders
         converted their shares of Series A Preferred Stock into Common Stock
         immediately prior to such capital reorganization, merger,
         consolidation, or sale. In any such case, appropriate provisions shall
         be made with respect to the rights of the holders of the Series A
         Preferred Stock after the reorganization, merger, consolidation or sale
         to the end that the provisions of this Section 4 (including without
         limitation provisions for adjustment of the Series A Conversion Price
         and the number of shares purchasable upon conversion of the Series A
         Preferred Stock) shall thereafter be applicable, as nearly as may be,
         with respect to any shares of stock, securities or assets to be
         deliverable thereafter upon the conversion of the Series A Preferred
         Stock. The provisions of this Section 4(j) shall not in any way limit
         the rights of the holders of Series A Preferred Stock under Sec tion 2
         hereof if an election to have this Section 4(j) apply to such
         transaction is not made by such holders.

                           (k) Exceptions to Adjustment of Series A Conversion
         Price. Notwith standing anything herein to the contrary, in the event
         that (i) the Corporation completes an issuance of new securities (for
         purposes of this paragraph, the "New Securities") that results in an
         adjustment of the Series A Conversion Price pursuant to Section
         4(h)(ii) or Section 4(h)(iii) and which the holders of Series A
         Preferred Stock had a right to purchase pursuant to Article IV of the
         Stockholders Agreement and (ii) any holder of the Series A Preferred
         Stock does not purchase its pro rata share (as defined in Article IV of
         the Stockholders Agreement) of such New Securities, then such holder (a
         "Non-Participating Holder") shall not be entitled to the benefits of
         Section 4(h)(ii) or Section 4(h)(iii), as applicable, with respect to
         any adjustment to the Series A Conversion Price resulting from that
         issuance or any future issuances of New Securities and all of such
         Non-Participating Holder's shares of Series A Preferred Stock shall
         immediately and automatically, without further action by such
         Non-Participating Holder, be converted on a share-for-share basis



<PAGE>


         to a New Series of Diluted Series A Preferred Stock, which shall be
         identical in all respects to the Series A Preferred Stock except that
         (A) the Series A Conversion Price of such New Series of Diluted Series
         A Preferred Stock shall be equal to the Series A Conversion Price of
         the Series A Preferred Stock in effect immediately prior to the
         issuance of such New Securities and (B) the terms of such New Series of
         Diluted Series A Preferred Stock shall not contain any provision for
         adjustment thereof similar to Section 4(h)(ii) or Section 4(h)(iii)
         hereof. Prior to the issuance of any New Series of Diluted Series A
         Preferred Stock (a) the Board of Directors shall designate the number
         of shares and the New Series of Diluted Series A Preferred Stock to be
         issued in accordance with this Section 4(k) at that time and (b) the
         Corporation shall file all certificates and take all actions necessary
         to effectuate the foregoing. Any holder of Series A Preferred Stock
         whose shares are automatically converted pursuant to this Section 4(k)
         into shares of a New Series of Diluted Series A Preferred Stock shall
         surrender the certificate or certifi cates representing the Series A
         Preferred Stock so converted, duly assigned or endorsed for transfer to
         the Corporation (or accompanied by duly executed stock powers relating
         thereto), at the principal executive office of the Corporation or the
         offices of the transfer agent for the Series A Preferred Stock or such
         office or offices in the continental United States of an agent for
         conversion as may from time to time be designated by notice to the
         holders of the Series A Preferred Stock by the Corporation, or shall
         deliver an Affidavit of Loss with respect to such certificates. Upon
         surrender of a certificate representing Series A Preferred Stock for
         conversion under this Section 4(k), the Corporation shall issue and
         send by hand delivery, by courier or by first class mail (postage
         prepaid) to the holder thereof or to such holder's designee, at the
         address designated by such holder, a certificate or certificates for
         the number of shares of the New Series of Diluted Series A Preferred
         Stock to which such holder shall be entitled upon such automatic
         conversion. The issuance and delivery of certificates for a New Series
         of Diluted Series A Preferred Stock upon conversion of Series A
         Preferred Stock will be made without charge to the holders of such
         shares for any issuance tax in respect thereof or other costs incurred
         by the Corporation in connection with such conversion and the related
         issuance of such stock. Each share of Series A Preferred Stock
         converted pursuant to this Section 4(k) shall be canceled and retired
         as provided in Section 7 hereof. In the event that any Non-Participat
         ing Holder fails to surrender its certificates as provided hereunder,
         such certificate shall nonetheless represent only the right to receive
         a New Series of Diluted Series A Preferred Stock, as provided
         hereunder.

                  Notwithstanding anything herein to the contrary, in no event
shall the Corporation's issuance and sale of Additional Series B Preferred
Shares pursuant to the Purchase Agreement constitute an issuance of New
Securities hereunder.

                           (l) Waiver. The holder or holders of not less than
         sixty-six and two-thirds percent (662/3%) of the outstanding Series A
         Preferred Stock may, by written notice to the Corporation, waive any
         adjustment to the Series A Conversion Price required under this Section
         4.



<PAGE>


                           (m) Notices. In each case of an adjustment or
         readjustment of the Series A Conversion Price, the Corporation will
         furnish each holder of Series A Preferred Stock with a certificate,
         prepared by the chief financial officer of the Corporation, showing
         such adjustment or readjustment, and stating in detail the facts upon
         which such adjustment or readjustment is based.

                  5.       Redemption.

                           (a) On or After February 1, 2008. At any time on or
         after February 1, 2008, at the election of the holders of a majority of
         the outstanding Series A Preferred Stock and Diluted Series A Preferred
         Stock, voting together as a single class on an as-converted basis, the
         Corporation shall redeem each share of Series A Preferred Stock and
         Diluted Series A Preferred Stock then outstanding for a cash price (the
         "Series A Redemption Price") equal to the greater of (i) the Series A
         Liquidation Preference Amount or (ii) the fair market value of the
         Series A Preferred Stock as of the date of redemption (the "Series A
         Redemption Date") as determined in accordance with Section 5(d) below.

                           (b) Termination of Rights. From and after the Series
         A Redemption Date, unless there shall have been a default in payment or
         tender by the Corporation of the Series A Redemption Price, all rights
         of the holders with respect to such redeemed shares of Series A
         Preferred Stock (except the right to receive the Series A Redemption
         Price in accordance with the terms hereof upon surrender of their
         certificate) shall cease and such shares shall not thereafter be
         transferred on the books of the Corporation or be deemed to be
         outstanding for any purpose whatsoever.

                           (c) Insufficient Funds. If the funds of the
         Corporation legally available for redemption of shares of Series A
         Preferred Stock and Diluted Series A Preferred Stock to be redeemed on
         the Series A Redemption Date are insufficient to redeem the total
         number of shares of Series A Preferred Stock and Diluted Series A
         Preferred Stock, the Corporation shall use those funds which are
         legally available to redeem the maximum possible number of such shares
         ratably among the holders of such shares to be redeemed. At any time
         thereafter when additional funds of the Corporation are legally
         available for the redemption of shares of Series A Preferred Stock and
         Diluted Series A Preferred Stock, such funds will immediately be used
         to redeem the balance of the shares which the Corporation has become
         obligated to redeem on the Series A Redemption Date but which it has
         not redeemed at the Series A Redemption Price together with any accrued
         interest thereon as provided below. If any shares of Series A Preferred
         Stock are not redeemed because the Corporation failed to pay or tender
         to pay the aggregate Series A Redemption Price on all outstanding
         shares of Series A Preferred Stock and Diluted Series A Preferred
         Stock, (i) all shares which have not been redeemed shall remain
         outstanding and entitled to all the rights and preferences provided
         herein, and the Corporation shall pay interest on the unpaid portion of
         the Series A Redemption Price for the unredeemed portion at a per annum
         rate equal to twenty percent (20%) or the maximum rate of interest
         permitted under applicable law, whichever is less and (ii) if such
         Series A Redemption Price shall remain unpaid for a period of nine (9)
         months, then the Board of Directors shall take all



<PAGE>


         actions that it deems necessary to fund the Series A Redemption Price,
         including, without limitation, the sale or liquidation of the
         Corporation.

                           (d)      Fair Market Value Determination.

                                    (i) If the Corporation's Common Stock is
                  publicly traded at the Series A Redemption Date, the Fair
                  Market Value of each share of Series A Preferred Stock or
                  Diluted Series A Preferred Stock shall equal the product of
                  the number of shares of Common Stock into which each share of
                  the Series A Pre ferred Stock or Diluted Series A Preferred
                  Stock may then be converted multiplied by the average closing
                  price for the Corporation's Common Stock for the thirty (30)
                  trading days immediately preceding the Series A Redemption
                  Date.

                                    (ii) If the Corporation's Common Stock is
                  not publicly traded on the Series A Redemption Date, the Fair
                  Market Value shall be determined in accordance with the
                  following provisions. Within fifteen (15) days after the
                  redemption election by the holders of Series A Preferred Stock
                  and Diluted Series A Preferred Stock pursuant to Section 5(a),
                  the Corporation shall deliver to each holder of Series A
                  Preferred Stock and Diluted Series A Preferred Stock its
                  estimate of the Fair Market Value of the Series A Preferred
                  Stock to be redeemed. If the holders of sixty-six and
                  two-thirds percent (662/3%) of the outstanding shares of the
                  Series A Preferred Stock and Diluted Series A Preferred Stock,
                  voting together as a single class on an as-converted basis, do
                  not object in writing to the Corporation's estimate of the
                  Fair Market Value of the Series A Preferred Stock, within
                  fifteen (15) days after receipt of the Corporation's written
                  notice thereof, such estimate shall be the Fair Market Value
                  for purposes of determining the Series A Redemption Price of
                  the Series A Preferred Stock. If the holders of sixty-six and
                  two-thirds percent (662/3%) of the outstanding shares of the
                  Series A Preferred Stock and Diluted Series A Preferred Stock,
                  voting together as a single class on an as-converted basis, do
                  timely object to the Corporation's estimate of Fair Market
                  Value, the Corporation and such holders shall seek for a
                  ten-day period thereafter to negotiate the Fair Market Value
                  in good faith. If the Corpora tion and the holders of
                  sixty-six and two-thirds percent (662/3%) of the outstanding
                  shares of the Series A Preferred Stock and Diluted Series A
                  Preferred Stock, voting together as a single class on an
                  as-converted basis, are unable to agree upon such Fair Market
                  Value by the end of such period, each of the Corporation and
                  the holders (acting at the direction of a majority of the
                  outstanding shares of Series A Preferred Stock and Diluted
                  Series A Preferred Stock, voting together as a single class on
                  an as-converted basis) shall, within ten (10) days thereafter,
                  select an unaffiliated investment banking firm of nationally
                  recognized standing in the telecommunications industry to
                  appraise the Fair Market Value of the Series A Preferred
                  Stock. Each such firm will deliver its appraisal of the Fair
                  Market Value within fifteen (15) days thereafter, and if the
                  lower appraisal is at least ninety percent (90%) of the higher
                  appraisal, the arithmetic mean of the two shall be the Fair
                  Market Value. If the two appraisals vary by more than ten
                  percent (10%), the



<PAGE>


                  two firms shall promptly select a third investment banking
                  firm of nationally recognized standing in the
                  telecommunications industry. Such third firm shall, within ten
                  (10) days thereafter, deliver its appraisal of the Fair Market
                  Value of the Series A Preferred Stock, the two appraisals
                  which are closest together in value shall be averaged and such
                  amount shall be the Fair Market Value for purposes of
                  determining the Series A Redemption Price.

                                    (iii) When determining the Fair Market Value
                  of the Series A Preferred Stock, the appraisers shall
                  consider, among other factors, book value, re placement value,
                  comparable public company valuations, earnings, the value of
                  future cash flows of the Corporation and its subsidiaries as
                  an on-going enterprise and the sale of various combinations of
                  the individual assets of the Corporation and its subsidiaries
                  as well as a sale of the Corporation and its subsidiaries as a
                  whole, choosing the manner of sale which maximizes the
                  aggregate value of the assets being sold, and shall make no
                  deduction, discount or other subtraction what soever for the
                  possible minority status of any such holder or for any lack of
                  marketability of any shares of stock held by such holder or
                  any restrictions on transfer thereof. All costs of the
                  appraisals under this Section 5(d) shall be borne by the
                  Corporation.

                  6.       Restrictions and Limitations. So long as the Series A
Preferred Stock remains outstanding:

                           (a) The Corporation will not, without the affirmative
         vote or written consent of the holders of a majority of the issued and
         outstanding shares of Common Stock and Preferred Stock, voting as a
         single class on an as converted basis:

                                    (i) Authorize or issue, or obligate itself
                  to issue, any shares of Common Stock (other than pursuant to
                  the exercise of stock options or other rights granted under
                  the 1995 Stock Option Plan, 1996 Stock Option Plan and 1998
                  Stock Option Plan, or upon conversion of the Preferred Stock);

                                    (ii) Authorize any merger or consolidation
                  of the Corporation with or into any other corporation,
                  partnership or entity (with respect to which less than a
                  majority of the outstanding voting power of such surviving
                  corporation is held by stockholders of the Corporation
                  immediately prior to such event) or permit the sale of all or
                  any material portion of the capital stock or assets of the
                  Corporation (other than sales in the ordinary course of
                  business and consistent with past practices); or

                                    (iii) Incur, create, assume, become or be
                  liable in any manner with respect to, or permit to exist, any
                  new or additional indebtedness or liability (other than up to
                  $30 million in connection with the Corporation's revolving
                  credit facilities with Banque Paribas and Fleet National
                  Bank).



<PAGE>


                           (b) The Corporation will not, without the affirmative
         vote or written consent of holders of sixty-six and two-thirds percent
         (662/3%) of the issued and outstanding shares of Common Stock and
         Preferred Stock, voting as a single class on an as converted basis:

                                    (i) Authorize or issue, or obligate itself
                  to issue, any equity securities at an effective per share
                  price which is less than $173.25 (which price shall be
                  appropriately adjusted for stock splits, stock dividends,
                  recapitalizations and the like), other than any Additional
                  Series B Preferred Shares issued pursuant to the Purchase
                  Agreement;

                                    (ii) Authorize or issue a class or series of
                  stock having rights equal or senior to the Series B Preferred
                  Stock, or a new class or series of Preferred Stock, other than
                  any Additional Series B Preferred Shares issued pursuant to
                  the Purchase Agreement;

                                    (iii) Authorize any acquisition, merger or
                  consolidation of assets or stock of another corporation,
                  partnership or entity in exchange for shares of equity
                  securities of the Corporation which results in dilution to the
                  existing stockholders, on a fully diluted, as converted basis,
                  in excess of fifteen percent (15%); or

                                    (iv) Authorize or permit the reorganization,
                  liquidation, dissolution or winding up of the Corporation.

                           (c) The Corporation will not amend the charter
         documents of the Corporation so as to adversely effect the rights of
         the holders of Series A Preferred Stock with respect to dividends,
         liquidation preferences or redemption without the vote or affirmative
         written consent of holders of eighty percent (80%) of the outstanding
         shares of Series A Preferred Stock and Diluted Series A Preferred Stock
         voting together as a single class, on an as-converted basis or, amend
         the charter documents or by-laws of the Corporation in any manner that
         adversely affects any other preferences, powers, rights or privileges
         of the holders of Series A Preferred Stock without the vote or
         affirmative written consent of holders of at least sixty-six and
         two-thirds percent (662/3%) of the outstanding shares of Series A
         Preferred Stock and Diluted Series A Preferred Stock voting together as
         a single class, on an as-converted basis;

                           (d) The Corporation will not, without the affirmative
         vote of the holders of a majority of the outstanding shares of Series A
         Preferred Stock voting as a separate class increase or decrease (other
         than by conversion as permitted hereby) the total number of authorized
         shares of Series A Preferred Stock.

                  7.       No Reissuance of Series A Preferred Stock. No share 
or shares of the Series A Preferred Stock acquired by the Corporation by reason
of redemption, purchase, conversion (including, without limitation, conversion
of Series A Preferred Stock into



<PAGE>


Undesignated Preferred Stock under Section 4(k) hereof) 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 the Series A Preferred Stock
accordingly.

                  8.       Notices of Record Date. In the event (i) the 
Corporation establishes a record date to determine the holders of any class of
securities who are entitled to receive any dividend or other distribution, or
(ii) there occurs any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation, and any transfer of all or
substantially all of the assets of the Corporation to any other corporation, or
any other entity or person, or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the Corporation shall mail to each
holder of Series A Preferred Stock at least twenty (20) days prior to the record
date specified therein, a notice specifying (a) the date of such record date for
the purpose of such dividend or distribution and a description of such dividend
or distribution, (b) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective, and (c) the time, if any, that is to
be fixed, as to when the holders of record of Preferred Stock and Common Stock
(or other securities) shall be entitled to exchange their shares of Preferred
Stock and Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up.

                  9.       Other Rights. Except as otherwise provided in the 
charter documents of the Corporation, as amended, shares of Series A Preferred
Stock and shares of Common Stock shall be identical in all respects (each share
of Series A Preferred Stock having equivalent rights to the maximum number of
shares of Common Stock into which it is then convertible), shall have the same
powers, preferences and rights, without preference of any such class or share
over any other such class or share, and shall be treated as a single class of
stock for all purposes.

                  10.      Miscellaneous.

                           (a) All notices referred to herein shall be in
         writing, and all notices hereunder shall be deemed to have been given
         upon the earlier of delivery thereof by hand delivery, by courier, or
         by standard form of telecommunication, addressed: (i) if to the
         Corporation, to its principal executive office (Attention: President)
         and to the transfer agent, if any, for the Series A Preferred Stock or
         other agent of the Corporation designated as permitted hereby, (ii) if
         to any holder of the Preferred Stock or Common Stock, as the case may
         be, to such holder at the address of such holder as listed in the stock
         record books of the Corporation (which may include the records of any
         transfer agent for the Preferred Stock or Common Stock, as the case may
         be) or (iii) to such other address as the Corporation or any such
         holder, as the case may be, shall have designated by notice similarly
         given.



<PAGE>


                           (b) The Corporation may appoint, and from time to
         time discharge and change, a transfer agent of the Series A Preferred
         Stock. Upon any such appointment or discharge of a transfer agent, the
         Corporation shall send notice thereof by hand delivery, by courier, by
         standard form of telecommunication or by first class mail (postage
         prepaid), to each holder of record of Series A Preferred Stock.

                           (c) The Board of Directors is hereby authorized to
         designate and issue additional series of Diluted Series A Preferred
         Stock in accordance with Section 4(k) hereof. The terms of such
         additional series of Diluted Series A Preferred Stock shall be
         identical to the terms of the Series A Preferred Stock at the time of
         such designation, except that (i) each additional series of Diluted
         Series A Preferred Stock shall not have provisions similar to Section
         4(h)(ii) or Section 4(h)(iii) above and (ii) the Board of Directors
         shall designate the conversion price for such additional series of
         Diluted Series A Preferred Stock which shall be equal to the conversion
         price of the Series A Preferred Stock being converted pursuant to
         Section 4(k) in effect immediately prior to the issuance of the New
         Securities (as defined in Section 4(k) hereof).

         D.  FIRST SERIES OF DILUTED SERIES A PREFERRED STOCK

                  1.       Dividends.

                           (a) The holders of the First Series of Diluted Series
         A Preferred Stock shall be entitled to continue to receive the Series A
         Cumulative Dividend. Such dividends shall accrue on a daily basis,
         shall be cumulative from July 31, 1997 and shall be payable out of
         funds legally available therefor, when and as declared by the Board of
         Directors and, in any event, upon redemption of the Series A Preferred
         Stock or any liquidation of the Corporation. Each such Series A
         Cumulative Dividend shall be paid to the holders of record of shares of
         the First Series of Diluted Series A Preferred Stock as they appear on
         the stock register on the applicable record date, and in the event that
         Series A Cumulative Dividends are not paid as of any calendar year end,
         such dividends shall thereafter compound and accrue additional Series A
         Cumulative Dividends at the applicable dividend rate.

                           (b) For so long as any shares of First Series of
         Diluted Series A Preferred Stock are outstanding, no dividends shall be
         declared or paid or set apart for payment on any shares of any other
         class or classes of stock of the Corporation or any series thereof
         (other than the Series B Preferred Stock, the Diluted Series B
         Preferred Stock and the Redeemable Preferred Stock), nor shall any
         shares of capital stock be redeemed, purchased or otherwise acquired
         for any consideration (or any moneys to be paid to or made available
         for a sinking fund for the redemption of any such shares) by the
         Corporation (except (i) by conversion into or exchange for shares of
         the Corporation ranking junior to the First Series of Diluted Series A
         Preferred Stock as to dividends and upon liquidation, (ii) for
         conversion of any series of Preferred Stock to another series of
         Preferred Stock, (iii) for conversion of Series B Preferred Stock to
         Redeemable Preferred Stock and Common Stock, (iv) for redemption of
         Redeemable Preferred Stock under the


<PAGE>


         terms set forth herein, and (v) for repurchases of shares of Common
         Stock by the Corpo ration under employee stock plans and programs
         approved by the Board of Directors), provided that the repurchase price
         does not exceed the lesser of (A) the purchase price paid to the
         Company for such shares and (B) the fair market value of such shares at
         the time of such repurchase (as determined by the Board of Directors in
         its sole discretion).

                           (c) In addition, the holders of the First Series of
         Diluted Series A Preferred Stock shall be entitled to receive out of
         funds legally available therefor, dividends (other than dividends paid
         in additional shares of Common Stock) at the same rate as dividends are
         paid with respect to the Common Stock (treating each share of First
         Series of Diluted Series A Preferred Stock as being equal to the
         maximum number of shares of Common Stock into which each such share of
         First Series of Diluted Series A Preferred Stock could then be
         converted pursuant to the provisions of Section 4 hereof).

                  2.       Liquidation Events and Corporate Dispositions.

                           (a) Liquidation Events. In the event of any
         Liquidation Event, the holders of the First Series of Diluted Series A
         Preferred Stock shall be entitled to receive, in cash, out of the
         assets of the Corporation available for distribution to stockholders
         after the payment in full of (i) the Series B Liquidation Preference
         Amount due to the holders of Series B Stock, or (ii) the Redeemable
         Base Liquidation Amount (as defined in Section 2 of Part B) due to the
         holders of Redeemable Preferred Stock, but before any payment shall be
         made to the holders of any other capital stock of the Corporation
         junior to the First Series of Diluted Series A Preferred Stock, on a
         pro rata basis with the holders of Series A Preferred Stock and other
         series of Diluted Series A Preferred Stock, if any (based on the ratio
         which the shares of Series A Preferred Stock or Diluted Series A
         Preferred Stock of each holder bears to all the issued and outstanding
         shares of Series A Preferred Stock and Diluted Series A Preferred
         Stock), an amount equal to the Series A Liquidation Preference Amount;
         provided, however, that if upon any such Liquidation Event, the holders
         of the outstanding shares of the First Series of Diluted Series A
         Preferred Stock would receive more than the Series A Liquidation
         Preference Amount if their shares were converted into Common Stock
         pursuant to the provisions of Section 4 hereof immediately prior to the
         record date for distributions in connection with such Liquidation
         Event, then the holders of the First Series of Diluted Series A
         Preferred Stock shall be entitled to receive, in lieu of the Series A
         Liquidation Preference Amount, in cash, out of the assets of the
         Corporation available for distribution to stockholders after the
         payment in full of (i) the Series B Liquidation Preference Amount due
         to the holders of Series B Preferred Stock, and (ii) the Redeemable
         Base Liquidation Amount due to the holders of Redeemable Preferred
         Stock, but before any payment shall be made to the holders of any other
         capital stock of the Corporation junior to the Series A Preferred
         Stock, pro rata with the holders of Series A Preferred Stock and other
         series of Diluted Series A Preferred Stock (on an as-converted basis),
         an amount equal to the ratable share of the assets and funds available
         for distribution to holders of Common Stock and Series B Preferred
         Stock, with such distributions to be made as if each share of First
         Series of Diluted Series A Preferred Stock had been converted into the
         maximum number of shares of Common Stock issuable


<PAGE>


         upon the conversion of such share of First Series of Diluted Series A
         Preferred Stock immediately prior to such Liquidation Event. If the
         assets and funds available for distribution among the holders of the
         First Series of Diluted Series A Preferred Stock shall be insufficient
         to permit the payment to the holders of the Diluted Series A Preferred
         Stock of the full Series A Liquidation Preference Amount, then the
         assets and funds of the Corporation legally available for distribution
         (after the payment in full of the Series B Liquidation Preference
         Amount due to the holders of Series B Stock, and the Redeemable Base
         Liquidation Amount due to the holders of Redeemable Preferred Stock)
         shall be distributed ratably among the holders of the First Series of
         Diluted Series A Preferred Stock, Series A Preferred Stock and the
         other series of Diluted Series A Preferred Stock (based on the ratio
         which the shares of Series A Preferred Stock or Diluted Series A
         Preferred Stock of each holder bears to all the issued and outstanding
         shares of Series A Preferred Stock and Diluted Series A Preferred
         Stock). The provisions of this Section 2 shall not in any way limit the
         right of the holders of Diluted Series A Preferred Stock to elect to
         convert their shares into Common Stock pursuant to Section 4 prior to
         or in connection with any such Liquidation Event.

                           (b) In the event of a Corporate Disposition, the
         holders of First Series of Diluted Series A Preferred Stock shall be
         entitled to the application of the provisions of this Section 2(b) upon
         the occurrence of such Corporate Disposition unless the holders of not
         less than sixty-six and two-thirds percent (662/3%) of the outstanding
         shares of Series A Preferred Stock and Diluted Series A Preferred
         Stock, voting together as a single class on an as-converted basis,
         shall have elected the application of the provisions of Section 4(j)
         hereof. In the event of a Corporate Disposition, then, as a part of and
         as a condition to the effectiveness of such Corporate Disposition
         (unless such holders shall have elected the application of the
         provisions of Section 4(j) hereof), the Corporation shall (after the
         payment in full of the Total Series B Liquidation Amount due to the
         holders of Series B Stock and the Redeemable Redemption Price due to
         the holders of Redeemable Preferred Stock), on the effective date of
         such Corporate Disposition, redeem all of the outstanding shares of
         First Series of Diluted Series A Preferred Stock for an amount equal to
         the Series A Liquidation Preference Amount; provided, however, that if
         upon any such Corporate Disposition, the holders of the outstanding
         shares of First Series of Diluted Series A Preferred Stock would
         receive more than the Series A Liquidation Preference Amount if their
         shares were converted into Common Stock pursuant to the provisions of
         Section 4 hereof immediately prior to such Corporate Disposition, then
         the Corporation shall, on the effective date of such Corporate
         Disposition, redeem all of the outstanding shares of First Series of
         Diluted Series A Preferred Stock and the holders of the First Series of
         Diluted Series A Preferred Stock shall be entitled to receive (after
         the payment in full of the Total Series B Liquidation Amount due to the
         holders of Series B Stock and the Redeemable Redemption Price due to
         the holders of Redeemable Preferred Stock), an amount equal to the
         ratable share of the proceeds of such Corporate Disposition available
         for distribution to holders of Common Stock, with such distributions to
         be made as if each share of First Series of Diluted Series A Preferred
         Stock had been converted into the maximum number of shares of Common
         Stock issuable upon the conversion of such share of First Series of
         Diluted Series A Preferred Stock immediately prior to such Corporate


<PAGE>



         Disposition. Notwithstanding anything to the contrary set forth in this
         Section 2, in the event of a Corporate Disposition on or before
         December 4, 1998, the holders of the First Series of Diluted Series A
         Preferred Stock shall be entitled to receive, in lieu of the Series A
         Liquidation Preference Amount, in cash, out of the assets of the
         Corporation available for distribution to stockholders after the
         payment in full of (i) the Series B Liquidation Preference Amount due
         to the holders of Series B Preferred Stock, and (ii) the Redeemable
         Liquidation Preference Amount due to the holders of Redeemable
         Preferred Stock, but before any payment shall be made to the holders of
         any other capital stock of the Corporation junior to the First Series
         of Diluted Series A Preferred Stock, pro rata with the holders of
         Series A Preferred Stock and other series of Diluted Series A Preferred
         Stock, an amount equal to $259.88 per share of First Series of Diluted
         Series A Preferred Stock (adjusted for any stock split, combination,
         consolidation, or stock distributions or stock dividends with respect
         to such share), unless the holders of not less than sixty-six and
         two-thirds percent (662/3%) of the outstanding shares of Series A
         Preferred Stock and Diluted Series A Preferred Stock, voting together
         as a single class on an as-converted basis, expressly waive in writing
         the application of the provisions of this Section 2 in connection with
         such Corporate Disposition. The provisions of this Section 2 shall not
         in any way limit the rights of the holders of First Series of Diluted
         Series A Preferred Stock to elect the application of the provisions of
         Section 4(j) hereof in connection with a Corporate Disposition.

                           (c) Surrender of Certificates. On the effective date
         of any Corporate Disposition, the Corporation shall pay all cash and
         other consideration to which the holders of First Series of Diluted
         Series A Preferred Stock shall be entitled under this Section 2. Upon
         receipt of such payment, each holder of shares of First Series of
         Diluted Series A Preferred Stock shall surrender the certificate or
         certificates representing such shares, duly assigned or endorsed for
         transfer to the Corporation (or accompanied by duly executed stock
         powers relating thereto), at the principal executive office of the
         Corporation or the offices of the transfer agent for the Corporation,
         or shall notify the Corporation or any transfer agent that such
         certificates have been lost, stolen or destroyed and shall execute an
         Affidavit of Loss, and each surrendered certificate shall be canceled
         and retired.

                           (d) Notice. Prior to the occurrence of any
         Liquidation Event or Corporate Disposition, the Corporation will
         furnish each holder of First Series of Diluted Series A Preferred Stock
         notice in accordance with Section 7 hereof, together with a certificate
         prepared by the chief financial officer of the Corporation describing
         in detail the facts of such Liquidation Event or Corporate Disposition,
         stating in reasonable detail the amount(s) per share of First Series of
         Diluted Series A Preferred Stock each holder of First Series of Diluted
         Series A Preferred Stock would receive pursuant to the provisions of
         Section 2(a) hereof and stating in reasonable detail the facts upon
         which such amount was determined and, in connection with any Corporate
         Disposition, describing in reasonable detail all material terms of such
         Corporate Disposition, including without limitation the consideration
         to be delivered in connection with such Corporate Disposition,


<PAGE>


         the valuation of the Corporation at the time of such Corporate
         Disposition and the identities of the parties to the Corporate
         Disposition.

                  3.       Voting.

                           (a) General. Except as otherwise expressly provided
         herein or as required by law, the holder of each share of First Series
         of Diluted Series A Preferred Stock shall be entitled to vote on all
         matters submitted to a stockholder vote or consent. Each share of First
         Series of Diluted Series A Preferred Stock shall entitle the holder
         thereof to such number of votes per share as shall equal the maximum
         number of shares of Common Stock into which each share of First Series
         of Diluted Series A Preferred Stock is then convertible in accordance
         with the provisions of Section 4 hereof at the record date for the
         determination of stockholders entitled to vote on such matter or, if no
         record date is established, at the date such vote is taken or any
         written consent of stockholders is solicited. Except as otherwise
         expressly provided herein (including without limitation the provisions
         of Section 6 hereof) or as required by law, the holders of shares of
         Preferred Stock and the Common Stock shall vote together as a single
         class on all matters.

                           (b) Board of Directors. The holders of Preferred
         Stock shall be entitled to vote as a class (with all series of
         Preferred Stock voting together as a single class, on an as-converted
         basis) for the election of two (2) directors. The remainder of the
         directors shall be elected by the holders of the Preferred Stock and
         the Common Stock voting together as a single class. In any vote by the
         holders of the Preferred Stock each share of First Series of Diluted
         Series A Preferred Stock shall be entitled to the number of votes
         determined as provided in Section 3(a).

                  4.       Conversion Rights. The holders of First Series of 
Diluted Series A Preferred Stock shall have conversion rights as follows:

                           (a) Voluntary Conversion. At any time, each holder of
         shares of First Series of Diluted Series A Preferred Stock shall be
         entitled, without the payment of any additional consideration, to cause
         any or all outstanding shares of First Series of Diluted Series A
         Preferred Stock held by such holder to be converted into the number of
         fully-paid and nonassessable shares of Class A Common Stock which
         results from dividing the First Series of Diluted Series A Conversion
         Price (as defined below) then in effect at the time of conversion into
         the Conversion Value of the First Series of Diluted Series A Preferred
         Stock, which shall be $173.25 per share. The "First Series of Diluted
         Series A Conversion Price" shall be $173.25 per share of Common Stock,
         subject to adjustment from time to time as provided in this Section 4.
         If a holder of First Series of Diluted Series A Preferred Stock elects
         to convert under this Section 4(a), such holder shall deliver to the
         Corpora tion a written notice of conversion specifying (i) the number
         of shares of First Series of Diluted Series A Preferred Stock to be
         converted, (ii) the name or names in which such holder wishes the
         certificate or certificates for Common Stock and for any First Series
         of Diluted Series A Preferred Stock not to be so converted to be issued
         and (iii) the address


<PAGE>


         to which such holder wishes delivery to be made of such new
         certificates to be issued upon such conversion.

                           (b) Automatic Conversion. Each share of First Series
         of Diluted Series A Preferred Stock shall automatically be converted,
         without the payment of any additional consideration, into shares of
         Common Stock on the basis provided in Section 4(a) above (i) upon the
         closing of a Series A Qualified Public Offering, or (ii) upon the
         closing of a Series A Non-Qualified Public Offering.

                           (c) Conversion Procedures. Any holder of First Series
         of Diluted Series A Preferred Stock converting such shares into shares
         of Common Stock, or whose shares are automatically converted pursuant
         to Section 4(b), shall surrender the certificate or certificates
         representing the First Series of Diluted Series A Preferred Stock being
         converted, duly assigned or endorsed for transfer to the Corporation
         (or accompanied by duly executed stock powers relating thereto), at the
         principal executive office of the Corporation or the offices of the
         transfer agent for the First Series of Diluted Series A Preferred Stock
         or such office or offices in the continental United States of an agent
         for conversion as may from time to time be designated by notice to the
         holders of the First Series of Diluted Series A Preferred Stock by the
         Corporation, or shall deliver an Affidavit of Loss with respect to such
         certificates. Upon surrender of a certificate representing First Series
         of Diluted Series A Preferred Stock for conversion, the Corporation
         shall issue and send by hand delivery, by courier or by first class
         mail (postage prepaid) to the holder thereof or to such holder's
         designee, at the address designated by such holder, a certificate or
         certificates for the number of shares of Common Stock to which such
         holder shall be entitled upon conversion. In the event that there shall
         have been surrendered a certificate or certificates representing First
         Series of Diluted Series A Preferred Stock, only part of which are to
         be converted, the Corporation shall issue and send to such holder or
         such holder's designee, in the manner set forth in the preceding
         sentence, a new certificate or certificates representing the number of
         shares of First Series of Diluted Series A Preferred Stock which shall
         not have been converted. The issuance and delivery of certificates for
         Common Stock upon conversion of First Series of Diluted Series A
         Preferred Stock will be made without charge to the holders of such
         shares for any issuance tax in respect thereof or other costs incurred
         by the Corporation in connection with such conversion and the related
         issuance of such stock.

                           (d) Effective Date of Conversion. The issuance by the
         Corporation of shares of Common Stock upon a conversion of First Series
         of Diluted Series A Preferred Stock into shares of Common Stock at the
         option of the holder(s) thereof pursuant to Section 4(a) or by
         operation of Section 4(b) hereof shall be effective as of the surrender
         of the certificate or certificates for the First Series of Diluted
         Series A Preferred Stock to be converted, duly assigned or endorsed for
         transfer to the Corporation (or accompanied by duly executed stock
         powers relating thereto) or delivery of an Affidavit of Loss with
         respect to such certificates. The issuance by the Corporation of shares
         of Common Stock upon a conversion of First Series of Diluted Series A
         Preferred Stock into Common Stock pursuant to Section 4(b) hereof upon
         a Series A Qualified Public Offering or a Series A



<PAGE>


         Non-Qualified Public Offering shall be deemed to be effective
         immediately prior to the closing of such Series A Qualified Public
         Offering or Series A Non-Qualified Public Offer ing. On and after the
         effective date of conversion, the person or persons entitled to receive
         the Common Stock issuable upon such conversion shall be treated for all
         purposes as the record holder or holders of such shares of Common
         Stock.

                           (e) No Impairment. The Corporation shall not, by
         amendment of its charter documents or through any reorganization,
         transfer of assets, consolidation, merger, 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 to be observed or
         performed hereunder by the Corporation but shall at all times in good
         faith assist in the carrying out of all the provisions of this Section
         4 and in the taking of all such action as may be necessary or
         appropriate in order to protect the conversion and other rights of the
         holders of the First Series of Diluted Series A Preferred Stock against
         impairment.

                           (f) Fractional Shares. The Corporation shall not be
         obligated to deliver to holders of First Series of Diluted Series A
         Preferred Stock any fractional share of Common Stock issuable upon any
         conversion of such Series A Preferred Stock, but in lieu thereof may
         make a cash payment for fair market value in respect thereof in any
         manner permitted by law.

                           (g) Reservation of Common Stock. The Corporation
         shall at all times reserve and keep available out of its authorized and
         unissued Common Stock, solely for issuance upon the conversion of First
         Series of Diluted Series A Preferred Stock as herein provided, free
         from any preemptive rights or other obligations, such number of shares
         of Class A Common Stock as shall from time to time be issuable upon the
         conversion of all the Series A Preferred Stock then outstanding. The
         Corporation shall prepare and shall use its best efforts to obtain and
         keep in force such governmental or regulatory permits or other
         authorizations as may be required by law, excluding permits or
         authorizations relat ing to registration under Federal or state
         securities laws, in order to enable the Corporation lawfully to issue
         and deliver to each holder of record of First Series of Diluted Series
         A Preferred Stock such number of shares of its Common Stock as shall
         from time to time be sufficient to effect the conversion of all First
         Series of Diluted Series A Preferred Stock then outstanding and
         convertible into shares of Class A Common Stock.

                           (h) Adjustments to First Series of Diluted Series A
         Conversion Price. The First Series of Diluted Series A Conversion Price
         in effect from time to time shall be subject to adjustment through the
         effective date of the conversion of all of the then outstanding First
         Series of Diluted Series A Preferred Stock and regardless of whether
         any shares of First Series of Diluted Series A Preferred Stock are then
         issued and outstanding. Upon the issuance of additional shares of
         Common Stock as a dividend or other distribution on outstanding Common
         Stock, the subdivision of outstanding shares of Common Stock into a
         greater number of shares of Common Stock, or the combination of
         outstanding shares of Common Stock into a smaller number of shares of
         Common Stock,


<PAGE>


         the First Series of Diluted Series A Conversion Price shall,
         simultaneously with the happening of such dividend, subdivision or
         split, be adjusted by multiplying the then effective First Series of
         Diluted Series A Conversion Price by a fraction, the numerator of which
         shall be the number of shares of Common Stock outstanding immediately
         prior to such event and the denominator of which shall be the number of
         shares of Common Stock outstanding immediately after such event. An
         adjustment made pursuant to this Section 4(h) shall be given effect,
         upon payment of such a dividend or distribution, as of the record date
         for the determination of stockholders entitled to receive such dividend
         or distribution (on a retroactive basis) and in the case of a
         subdivision or combination shall become effective immediately as of the
         effective date thereof.

                           (i) Other Adjustments. In the event the Corporation
         shall make or issue, or fix a record date for the determination of
         holders of Common Stock entitled to receive, a non-cash dividend or
         other distribution payable in securities of the Corporation other than
         shares of Common Stock, then and in each such event lawful and adequate
         provision shall be made so that the holders of First Series of Diluted
         Series A Preferred Stock shall receive upon conversion thereof in
         addition to the number of shares of Common Stock receivable thereupon,
         the number of securities of the Corporation which they would have
         received had their First Series of Diluted Series A Preferred Stock
         been converted into Common Stock on the date of such event and had they
         thereafter, during the period from the date of such event to and
         including the Conversion Date (as that term is hereafter defined),
         retained such securities receivable by them as aforesaid during such
         period.

                           If the Common Stock issuable upon the conversion of
         the First Series of Diluted Series A Preferred Stock shall be changed
         into the same or different number of shares of any class or classes of
         stock, whether by reorganization, reclassification or otherwise (other
         than a subdivision or combination of shares or stock dividend provided
         for above, or a reorganization, merger, consolidation or sale of assets
         provided for else where in this Section 4), then and in each such event
         the holder of each share of First Series of Diluted Series A Preferred
         Stock shall have the right thereafter to convert such share into the
         kind and amount of shares of stock and other securities and property
         receivable upon such reorganization, reclassification or other change,
         by holders of the number of shares of Common Stock into which such
         shares of First Series of Diluted Series A Preferred Stock might have
         been converted immediately prior to such reorga nization,
         reclassification or change, all subject to further adjustment as
         provided herein.

                           (j) Mergers and Other Reorganizations. If (i) at any
         time or from time to time there shall be a Corporate Disposition and
         (ii) the holders of sixty-six and two-thirds percent (662/3%) of the
         outstanding shares of Series A Preferred Stock and Diluted Series A
         Preferred Stock, voting together as a single class on an as-converted
         basis, ex pressly elect in writing to have the provisions of this
         Section 4(j), and not the provisions of Section 2, apply to such
         transaction, then, as a part of and as a condition to the effectiveness
         of such reorganization, merger, consolidation or sale, lawful and
         adequate provision shall be made so that the holders of the First
         Series of Diluted Series A


<PAGE>


         Preferred Stock shall thereafter be entitled to receive upon conversion
         of the First Series of Diluted Series A Preferred Stock the number of
         shares of stock or other securities or property of the Corporation or
         of the successor corporation resulting from such merger or
         consolidation or sale, to which such holders would have been entitled
         upon such capital reorganization, merger, consolidation or sale had
         such holders converted their shares of First Series of Diluted Series A
         Preferred Stock into Common Stock immediately prior to such capital
         reorganization, merger, consolidation, or sale. In any such case,
         appropriate provisions shall be made with respect to the rights of the
         holders of the First Series of Diluted Series A Preferred Stock after
         the reorganization, merger, consolidation or sale to the end that the
         provisions of this Section 4 (including without limitation provisions
         for adjustment of the First Series of Diluted Series A Conversion Price
         and the number of shares purchasable upon conversion of the First
         Series of Diluted Series A Preferred Stock) shall thereafter be
         applicable, as nearly as may be, with respect to any shares of stock,
         securities or assets to be deliverable thereafter upon the conversion
         of the First Series of Diluted Series A Preferred Stock. The provisions
         of this Section 4(j) shall not in any way limit the rights of the
         holders of First Series of Diluted Series A Preferred Stock under
         Section 2 hereof if an election to have this Section 4(j) apply to such
         transaction is not made by such holders.

                  Notwithstanding anything herein to the contrary, in no event
shall the Corporation's issuance and sale of Additional Series B Preferred
Shares pursuant to the Purchase Agreement constitute an issuance of New
Securities hereunder.

                           (k) Waiver. The holder or holders of not less than
         sixty-six and two-thirds percent (662/3%) of the outstanding First
         Series of Diluted Series A Preferred Stock may, by written notice to
         the Corporation, waive any adjustment to the First Series of Diluted
         Series A Conversion Price required under this Section 4.

                           (l) Notices. In each case of an adjustment or
         readjustment of the First Series of Diluted Series A Conversion Price,
         the Corporation will furnish each holder of First Series of Diluted
         Series A Preferred Stock with a certificate, prepared by the chief
         financial officer of the Corporation, showing such adjustment or
         readjustment, and stating in detail the facts upon which such
         adjustment or readjustment is based.

                  5.       Redemption.

                           (a) On or After February 1, 2008. At any time on or
         after February 1, 2008, at the election of the holders of a majority of
         the outstanding Series A Preferred Stock and Diluted Series A Preferred
         Stock, voting together as a single class on an as-converted basis, the
         Corporation shall redeem each share of First Series of Diluted Series A
         Preferred Stock, Series A Preferred Stock and other series of Diluted
         Series A Preferred Stock then outstanding for the Series A Redemption
         Price equal to as of the Series A Redemption Date as determined in
         accordance with Section 5(d) of Part C hereof.




<PAGE>


                           (b) Termination of Rights. From and after the Series
         A Redemption Date, unless there shall have been a default in payment or
         tender by the Corporation of the Series A Redemption Price, all rights
         of the holders with respect to such redeemed shares of First Series of
         Diluted Series A Preferred Stock (except the right to receive the
         Series A Redemption Price in accordance with the terms hereof upon
         surrender of their certificate) shall cease and such shares shall not
         thereafter be transferred on the books of the Corporation or be deemed
         to be outstanding for any purpose whatsoever.

                           (c) Insufficient Funds. If the funds of the
         Corporation legally available for redemption of shares of Series A
         Preferred Stock and Diluted Series A Preferred Stock to be redeemed on
         the Series A Redemption Date are insufficient to redeem the total
         number of shares of Series A Preferred Stock and Diluted Series A
         Preferred Stock, the Corporation shall use those funds which are
         legally available to redeem the maximum possible number of such shares
         ratably among the holders of such shares to be redeemed. At any time
         thereafter when additional funds of the Corporation are legally
         available for the redemption of shares of Series A Preferred Stock and
         Diluted Series A Preferred Stock, such funds will immediately be used
         to redeem the balance of the shares which the Corporation has become
         obligated to redeem on the Series A Redemption Date but which it has
         not redeemed at the Series A Redemption Price together with any accrued
         interest thereon as provided below. If any shares of First Series of
         Diluted Series A Preferred Stock are not redeemed because the
         Corporation failed to pay or tender to pay the aggregate Series A
         Redemption Price on all outstanding shares of Series A Preferred Stock
         and Diluted Series A Preferred Stock, (i) all shares which have not
         been redeemed shall remain outstanding and entitled to all the rights
         and preferences provided herein, and the Corporation shall pay interest
         on the unpaid portion of the Series A Redemption Price for the
         unredeemed portion at a per annum rate equal to twenty percent (20%) or
         the maximum rate of interest permitted under applicable law, whichever
         is less and (ii) if such Series A Redemption Price shall remain unpaid
         for a period of nine (9) months, then the Board of Directors shall take
         all actions that it deems necessary to fund the Series A Redemption
         Price, including, without limitation, the sale or liquidation of the
         Corporation.

                  6.       Restrictions and Limitations. So long as the First
Series of Diluted Series A Preferred Stock remains outstanding:

                           (a) The Corporation will not, without the affirmative
         vote or written consent of the holders of a majority of the issued and
         outstanding shares of Common Stock and Preferred Stock, voting as a
         single class on an as converted basis:

                                    (i) Authorize or issue, or obligate itself
                  to issue, any shares of Common Stock (other than pursuant to
                  the exercise of stock options or other rights granted under
                  the 1995 Stock Option Plan, 1996 Stock Option Plan and 1998
                  Stock Option Plan, or upon conversion of the Preferred Stock);

                                    (ii) Authorize any merger or consolidation
                  of the Corporation with or into any other corporation,
                  partnership or entity (with respect to which less


<PAGE>


                  than a majority of the outstanding voting power of such
                  surviving corporation is held by stockholders of the
                  Corporation immediately prior to such event) or permit the
                  sale of all or any material portion of the capital stock or
                  assets of the Corporation (other than sales in the ordinary
                  course of business and consistent with past practices); or

                                    (iii) Incur, create, assume, become or be
                  liable in any manner with respect to, or permit to exist, any
                  new or additional indebtedness or liability (other than up to
                  $30 million in connection with the Corporation's revolving
                  credit facilities with Banque Paribas and Fleet National
                  Bank).

                           (b) The Corporation will not, without the affirmative
         vote or written consent of holders of sixty-six and two-thirds percent
         (662/3%) of the issued and outstanding shares of Common Stock and
         Preferred Stock, voting as a single class on an as converted basis:

                                    (i) Authorize or issue, or obligate itself
                  to issue, any equity securities at an effective per share
                  price which is less than $173.25 (which price shall be
                  appropriately adjusted for stock splits, stock dividends,
                  recapitalizations and the like), other than any Additional
                  Series B Preferred Shares issued pursuant to the Purchase
                  Agreement;

                                    (ii) Authorize or issue a class or series of
                  stock having rights equal or senior to the Series B Preferred
                  Stock, or a new class or series of Preferred Stock;

                                    (iii) Authorize any acquisition, merger or
                  consolidation of assets or stock of another corporation,
                  partnership or entity in exchange for shares of equity
                  securities of the Corporation which results in dilution to the
                  existing stockholders, on a fully diluted, as converted basis,
                  in excess of fifteen percent (15%); or

                                    (iv) Authorize or permit the reorganization,
                  liquidation, dissolution or winding up of the Corporation.

                           (c) The Corporation will not amend the charter
         documents of the Corporation so as to adversely effect the rights of
         the holders of First Series of Diluted Series A Preferred Stock with
         respect to dividends, liquidation preferences or redemption without the
         vote or affirmative written consent of holders of eighty percent (80%)
         of the outstanding shares of Series A Preferred Stock and Diluted
         Series A Preferred Stock voting together as a single class, on an
         as-converted basis or, amend the charter documents or by-laws of the
         Corporation in any manner that adversely affects any other preferences,
         powers, rights or privileges of the holders of Series A Preferred Stock
         without the vote or affirmative written consent of holders of at least
         sixty-six and two-thirds percent (662/3%) of the outstanding shares of
         Series A Preferred Stock and Diluted Series A Preferred Stock voting
         together as a single class, on an as-converted basis;

                           (d) The Corporation will not, without the affirmative
         vote of the holders of a majority of the outstanding shares of First
         Series of Diluted Series A Preferred Stock voting as a separate class
         increase or decrease (other than by conversion as permitted hereby) the
         total number of authorized shares of First Series of Diluted Series A
         Preferred Stock.

                  7.       No Reissuance of First Series of Diluted Series A
Preferred Stock. No share or shares of the First Series of Diluted Series A
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 the First Series of Diluted Series A Preferred Stock accordingly.

                  8.       Notices of Record Date. In the event (i) the
Corporation establishes a record date to determine the holders of any class of
securities who are entitled to receive any dividend or other distribution, or
(ii) there occurs any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation, and any transfer of all or
substantially all of the assets of the Corporation to any other corporation, or
any other entity or person, or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the Corporation shall mail to each
holder of First Series of Diluted Series A Preferred Stock at least twenty (20)
days prior to the record date specified therein, a notice specifying (a) the
date of such record date for the purpose of such dividend or distribution and a
description of such dividend or distribution, (b) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up is expected to become effective, and (c) the time, if
any, that is to be fixed, as to when the holders of record of Preferred Stock
and Common Stock (or other securities) shall be entitled to exchange their
shares of Preferred Stock and Common Stock (or other securities) for securities
or other property deliverable upon such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation or winding up.

                  9.       Other Rights. Except as otherwise provided in the
charter documents of the Corporation, as amended, shares of First Series of
Diluted Series A Preferred Stock and shares of Common Stock shall be identical
in all respects (each share of First Series of Diluted Series A Preferred Stock
having equivalent rights to the maximum number of shares of Common Stock into
which it is then convertible), shall have the same powers, preferences and
rights, without preference of any such class or share over any other such class
or share, and shall be treated as a single class of stock for all purposes.




<PAGE>


                  10.      Miscellaneous.

                           (a) All notices referred to herein shall be in
         writing, and all notices hereunder shall be deemed to have been given
         upon the earlier of delivery thereof by hand delivery, by courier, or
         by standard form of telecommunication, addressed: (i) if to the
         Corporation, to its principal executive office (Attention: President)
         and to the transfer agent, if any, for the First Series of Diluted
         Series A Preferred Stock or other agent of the Corporation designated
         as permitted hereby, (ii) if to any holder of the Preferred Stock or
         Common Stock, as the case may be, to such holder at the address of such
         holder as listed in the stock record books of the Corporation (which
         may include the records of any transfer agent for the Preferred Stock
         or Common Stock, as the case may be) or (iii) to such other address as
         the Corporation or any such holder, as the case may be, shall have
         designated by notice similarly given.

                           (b) The Corporation may appoint, and from time to
         time discharge and change, a transfer agent of the First Series of
         Diluted Series A Preferred Stock. Upon any such appointment or
         discharge of a transfer agent, the Corporation shall send notice
         thereof by hand delivery, by courier, by standard form of
         telecommunication or by first class mail (postage prepaid), to each
         holder of record of First Series of Diluted Series A Preferred Stock.

         E.  UNDESIGNATED PREFERRED STOCK

         The Undesignated Preferred Stock may be issued from time to time in one
or more series of any number of shares pursuant to Section 4(k) of Part A and
Section 4(k) of Part C hereof, provided that the aggregate number of shares
issued and not canceled of any and all such series, together with the aggregate
number of shares of Series B Preferred Stock and Series A Preferred Stock then
outstanding, shall not exceed 590,477 shares. Subject to the foregoing, the
Board of Directors of the Corporation is hereby authorized to determine and
alter all rights, preferences and privileges and qualifications, limitations and
restrictions thereof (including, without limitation, voting rights and the
limitation and exclusion thereof) granted to or imposed upon any wholly unissued
series of Preferred Stock and the number of shares constituting any such series
and the designation thereof, and to increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares of any
series subsequent to the issue of shares of that series then outstanding.

         F.  COMMON STOCK

         Except as otherwise provided in this Part F or as otherwise required by
applicable law, all shares of Class A Common Stock and Class B Common Stock
shall be identical in all respects and shall entitle the holders thereof to the
same rights, preferences and privileges, subject to the same qualifications,
limitations and restrictions, as set forth herein.

                  1.       Voting Rights. Except as otherwise provided in this
Part F or as otherwise required by applicable law, the holders of Class A Common
Stock shall be entitled to one vote per



<PAGE>


share on all matters to be voted on by the Corporation's stockholders, and the
holders of Class B Common Stock shall have no right to vote on any matters to be
voted on by the Corporation's stockholders; provided that the holders of the
Class B Common Stock shall have the right to vote as a separate class on any
merger or consolidation of the Corporation with or into another entity or
entities, or any recapitalization or reorganization, in which shares of Class B
Common Stock would receive or be exchanged for consideration different on a per
share basis from the consideration received with respect to or in exchange for
shares of Class A Common Stock or would otherwise be treated differently from
shares of Class A Common Stock, except that shares of Class B Common Stock may,
without such a separate class vote, receive or be exchanged for non-voting
securities (except as otherwise required by law) which are otherwise identical
on a per share basis in amount and form to the voting securities received with
respect to or in exchange for the Class A Common Stock so long as (i) such
non-voting securities are convertible into voting securities on the same terms
as the Class B Common Stock is convertible into Class A Common Stock and (ii)
all other consideration is equal on a per share basis.

                  2.       Dividends. As and when dividends are declared or paid
with respect to shares of Common Stock, whether in cash, property or securities
of the Corporation, the holders of Class A Common Stock and the holders of Class
B Common Stock shall be entitled to receive such dividends pro rata at the same
rate per share of each class of Common Stock; provided that (i) if dividends are
declared or paid in shares of Class A Common Stock or Class B Common Stock, the
dividends payable in shares of Class A Common Stock shall be payable to holders
of Class A Common Stock and the dividends payable in shares of Class B Common
Stock shall be payable to holders of Class A Common Stock and (ii) if the
dividends consist of other voting securities of the Corporation, the Corporation
shall make available to each holder of Class B Common Stock, at such holder's
request, dividends consisting of non-voting securities (except as otherwise
required by law) of the Corporation which are otherwise identical to the voting
securities and which are convertible into such voting securities on the same
terms as the Class B Common Stock is convertible into the Class A Common Stock.

                  3.       Liquidation. The holders of the Class A Common Stock 
and the holders of the Class B Common Stock shall be entitled to participate pro
rata at the same rate per share of each class of Common Stock in all
distributions to the holders of the Common Stock in any liquidation, dissolution
or winding up of the Corporation.

                  4.       Conversion.

                           (a)      Conversion of Class B Common Stock.

                                    (i) In connection with the occurrence (or
                  the expected occurrence an described in (iii) below) of any
                  Conversion Event, each holder of Class B Common Stock shall be
                  entitled to convert into an equal number of shares of Class A
                  Common Stock any or all of the shares of such holders Class B
                  Common Stock being (or expected to be) distributed, disposed
                  of or sold in connection with such Conversion Event.




<PAGE>


                                    (ii) For purposes of this Section 4(a), a
                  "Conversion Event" shall mean (a) any public offering or
                  public sale of securities of the Corporation (including a
                  public offering registered under the Securities Act and a
                  public sale pursuant to Rule 144 of the Securities Act or any
                  similar rule then in force), (b) any sale of securities of the
                  Corporation to a person or group of persons (within the
                  meaning of the Securities Exchange Act of 1934, as amended
                  (the "1934 Act"), if, after such sale, such person or group of
                  persons in the aggregate would own or control securities which
                  possess in the aggregate the ordinary voting power to elect a
                  majority of the Corporation's directors (provided that such
                  sale has been approved by the Corporation's Board of Directors
                  or a committee thereof), (c) any sale of securities of the
                  Corporation to a person or group of persons (within the
                  meaning of the 1934 Act) if, after such sale, such person or
                  group of persons in the aggregate would own or control
                  securities of the Corporation (excluding any Class B Common
                  Stock being converted and disposed of in connection with such
                  Conversion Event) which possess in the aggregate the ordinary
                  voting power to elect a majority of the Corporation's
                  directors, (d) any sale of securities of the Corporation to a
                  person or group of persons (within the meaning of the 1934
                  Act) if, after such sale, such person or group of persons
                  would not, in the aggregate, own, control or have the right to
                  acquire more than two percent (2%) of the outstanding
                  securities of any class of voting securities of the
                  Corporation, and (e) a merger, consolidation or similar
                  transaction involving the Corporation if, after such
                  transaction, a person or group of persons (within the meaning
                  of the 1934 Act) in the aggregate would own or control
                  securities which possess in the aggregate the ordinary voting
                  power to elect a majority of the surviving Corporation's
                  directors (provided that the transaction has been approved by
                  the Corporation's Board of Directors or a committee thereof).
                  For purposes of this Section 4(a), a "person" shall include
                  any natural person and any Corporation, partnership, joint
                  venture, trust, unincorporated organization and any other
                  entity or organization.

                                    (iii) Each holder of Class B Common Stock
                  shall be entitled to convert shares of Class B Common Stock in
                  connection with any Conversion Event if such holder reasonably
                  believes that such Conversion Event shall be consummated, and
                  a written request for conversion from any holder of Class B
                  Common Stock to the Corporation stating such holder's
                  reasonable belief that a Conversion Event shall occur shall be
                  conclusive and shall obligate the Corpora tion to effect such
                  conversion in a timely manner so as to enable each such holder
                  to participate in such Conversion Event. The Corporation shall
                  not cancel the shares of Class B Common Stock so converted
                  before the tenth day following such Conversion Event and shall
                  reserve such shares until such tenth day for reissuance in
                  compliance with the next sentence. If any shares of Class B
                  Common Stock are converted into shares of Class A Common Stock
                  in connection with a Conversion Event and such shares of Class
                  A Common Stock are not actually distributed, disposed of or
                  sold pursuant to such Conversion Event, such shares of Class A
                  Common Stock shall be promptly exchanged back into the same
                  number of shares of Class B Common Stock.



<PAGE>


                                    (iv) Notwithstanding any other provision
                  hereof, in the event that the initial holder of the Class B
                  Common Stock is licensed by the U.S. Small Business
                  Administration as a Small Business Investment Company (an
                  "SBIC") on or before September 1, 1996, then such initial
                  holder shall be entitled to convert the Class B Common Stock
                  held by such holder into Class A Common Stock within 3 months
                  after the date such license is effective, and in the event
                  that any entity controlling, controlled by or under common
                  control with such initial holder is licensed as an SBIC on or
                  before September 1, 1996, then any Class B Common Stock held
                  by such affiliate of the initial holder will be convertible
                  into Class A Common Stock within 3 months after the date such
                  license is effective.

                           (b)      Conversion Procedure.

                                    (i) Unless otherwise provided in connection
                  with a Conversion Event, each conversion of shares of Class B
                  Common Stock into shares of Class A Common Stock shall be
                  effected by the surrender of the certificate or certificates
                  representing the shares to be converted at the principal
                  office of the Corporation at any time during normal business
                  hours, together with a written notice by the holder of such
                  Class B Common Stock stating that such holder desires to
                  convert the shares, or a stated number of the shares, of Class
                  B Common Stock represented by such certificate or certificates
                  into Class A Common Stock. Unless otherwise provided in
                  connection with a Conversion Event, each conversion shall be
                  deemed to have been effected as of the close of business on
                  the date on which such certificate or certificates have been
                  surrendered and such notice has been received, and at such
                  time the rights of the holder of the converted Class B Common
                  Stock as such holder shall cease and the person or persons in
                  whose name or names the certificate or certificates for shares
                  of Class A Common Stock are to be issued upon such conversion
                  shall be deemed to have become the holder or holders of record
                  of the shares of Class A Common Stock represented thereby.

                                    (ii) Promptly after the surrender of
                  certificates and the receipt of such written notice, the
                  Corporation shall issue and deliver in accordance with the
                  surrendering holder's instructions (a) the certificate or
                  certificates for the Class A Common Stock issuable upon such
                  conversion and (b) a certificate representing any Class B
                  Common Stock which was represented by the certificate or
                  certificates delivered to the Corporation in connection with
                  such conversion but which was not converted.

                                    (iii) The issuance of certificates for Class
                  A Common Stock upon conversion of Class B Common Stock shall
                  be made without charge to the holders of such shares for any
                  issuance tax in respect thereof or other cost incurred by the
                  in connection with such conversion and the related issuance of
                  Class A Common Stock.




<PAGE>


                                    (iv) The Corporation shall at all times
                  reserve and keep available out of its authorized but unissued
                  shares of Class A Common Stock, solely for the purpose of
                  issuance upon the conversion of the Class B Common Stock, such
                  number of shares of Class A Common Stock issuable upon the
                  conversion of all outstanding Class B Common Stock. All shares
                  of Class A Common Stock which are so issuable shall, when
                  issued, be duly and validly issued, fully paid and
                  nonassessable and free from all taxes, liens and charges. The
                  Corporation shall take all such actions as may be necessary to
                  assure that all such shares of Class A Common Stock may be so
                  issued without violation of any applicable law or governmental
                  regulation or any requirements of any domestic securities
                  exchange upon which shares of Class A Common Stock may be
                  listed (except for official notice of issuance which shall be
                  immediately transmitted by the Corporation upon issuance).

                                    (v) The Corporation shall not close its
                  books against the transfer of Class B Common Stock or of Class
                  A Common Stock issued or issuable upon conversion of Class B
                  Common Stock in any manner which would interfere with the
                  timely conversion of Class B Common Stock. The Corporation
                  shall assist and cooperate with any holder of Class B Common
                  Stock required to make any governmental filings or obtain any
                  governmental approval prior to or in connection with any
                  conversion of Class B Common Stock hereunder (including,
                  without limitation, making any filings required to be made by
                  the Corporation).

                           (c)      Stock Splits. If the Corporation in any 
manner subdivides or combines the outstanding shares of one class of Common
Stock, the outstanding shares of the other class of Common Stock shall be
proportionately subdivided or combined in a similar manner.

                  5.       Amendment and Waiver. No amendment or waiver of any
provision of this Part F shall be effective without the prior approval of (i)
the holders of a majority of the then outstanding shares of Class B Common Stock
voting as a separate class and (ii) the holders of a majority of the then
outstanding shares of Class A Common Stock voting as a separate class.

         G. RANKING

         The Series B Stock shall rank pari passu with the Redeemable Preferred
Stock and senior to the Senior A Stock and the Common Stock as to redemptions,
dividends and the distribution of assets upon a Liquidation Event or Corporate
Disposition. The Series A Stock shall rank senior to the Common Stock as to
redemptions, dividends and the distribution of assets upon a Liquidation Event
or Corporate Disposition.




<PAGE>

                  IN WITNESS WHEREOF, TELETRAC HOLDINGS, INC. has caused this
Certificate to be signed by its Secretary, who hereby acknowledges under
penalties of perjury that the facts herein stated are true and that this
certificate is the act and deed of the Corporation, this
      th day of October, 1998.


                                                     TELETRAC HOLDINGS, INC.



                                                     By /s/ Steven D. Scheiwe
                                                         Steven D. Scheiwe
                                                         Secretary