<PAGE>   1

                                                                     Exhibit 4.3

                  CERTIFICATE OF DESIGNATIONS, PREFERENCES AND
                        RIGHTS OF SERIES A 8% CONVERTIBLE
                                 PREFERRED STOCK

                                       of

                                LENDINGTREE, INC.


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


         I, the undersigned, Douglas R. Lebda, Chief Executive Officer and
President of LendingTree, Inc., a Delaware corporation (the "Corporation"), in
accordance with the provisions of Sections 103 and 151 of the General
Corporation Law of the State of Delaware thereof, do hereby make this
Certificate of Designations and DO HEREBY CERTIFY:

         That pursuant to the authority conferred upon the Board of Directors by
the Amended and Restated Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation"), said Board of Directors on March 5, 2001,
adopted the following resolution providing for certain designations, preferences
and rights of 6,885,715 shares of Series A 8% Convertible Preferred Stock, par
value $0.01 per share:

         RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock, par value $0.01 per
share, of the Corporation be and it hereby is created, and that the designation
and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:


<PAGE>   2

Section 1. Designation and Amount. The shares of such series shall be designated
as "Series A 8% Convertible Preferred Stock" (the "Series A Preferred Stock")
and the authorized number of shares constituting such series shall be 6,885,715.
The initial stated value is $3.50 per share of Series A Preferred Stock (the
"Initial Stated Value").

Section 2. Priority. The Series A Preferred Stock shall, with respect to
dividend rights and rights upon any Liquidation Event (as defined below),
whether now or hereafter issued, rank senior to any class of common stock, par
value $0.01 per share, of the Corporation (the "Common Stock") and senior to any
other class or series of capital stock or preferred stock already established or
established hereafter by the Board of Directors (collectively, "Junior
Securities"), the terms of which shall specifically provide that such series
shall rank junior to the Series A Preferred Stock with respect to dividend
rights and rights upon liquidation, winding up or dissolution.

Section  3. Dividends and Distributions.

(a) The holders of the Series A Preferred Stock shall be entitled to receive
dividends on the Series A Preferred Stock equal to eight percent (8.00%) per
annum (or such rate as is then applicable pursuant to Section 5(b) or Section
6(a)) of the Stated Value Per Share (as defined below) payable at the
Corporation's option (i) in cash out of funds legally available therefor on each
Quarterly Dividend Payment Date (as defined below) or (ii) by an upward
adjustment (each an "Adjustment," collectively, the "Adjustments") to the Stated
Value Per Share on each then applicable Quarterly Dividend Payment Date. The
Initial Stated Value per share as cumulatively adjusted from time to time by
accumulated dividends or otherwise contemplated herein, shall be referred to as
the "Stated Value Per Share." The Corporation shall provide written notice on
the Quarterly Dividend Record Date (as defined below) if, and only if, the
Corporation elects to pay the dividend in cash on any given Quarterly Dividend
Payment Date; provided, however, if the Corporation elects to pay the dividend
in cash and such payment has not been credited to the account of the record
holder by wire transfer (pursuant to prior written instructions furnished to the
Corporation) within five (5) business days after the applicable Quarterly
Dividend Payment Date or the Corporation fails to give notice on or before the
Quarterly Dividend Record Date of its election to pay the dividend in cash, the
Corporation shall be deemed to have elected to pay the dividend as an adjustment
to the Stated Value Per Share in accordance with subclause (ii) above, and shall
take all appropriate action to pay such dividend in accordance with subclause
(ii).


                                       2
<PAGE>   3

(b) Dividends on the Series A Preferred Stock shall be cumulative and shall
accrue daily, whether or not funds are legally available therefor and whether or
not declared by the Board of Directors, from the first date on which any shares
of Series A Preferred Stock are issued (the "Issue Date"). Dividends on the
Series A Preferred Stock shall be payable on March 31, June 30, September 30 and
December 31 of each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on June 30, 2001 (the "Initial
Quarterly Dividend Payment") (and in the case of any accrued but unpaid
dividends, except as otherwise provided herein, at such additional times and for
such interim periods as may be determined by the Board of Directors) to the
holders of record as they appear on the stock books of the transfer agent for
the Corporation (the "Transfer Agent") on such record dates, which shall be ten
(10) business days preceding each Quarterly Dividend Payment Date (each such
date being referred to herein as a "Quarterly Dividend Record Date"). The amount
of dividends payable per share of Series A Preferred Stock for each quarterly
dividend period shall be computed by multiplying the then applicable Stated
Value Per Share by the annual dividend amount of eight percent (8.00%) (or such
rate as is then applicable pursuant to Section 5(b) or Section 6(a)) per share
of Series A Preferred Stock, divided by four. The amount of dividends payable
for the initial dividend period and dividends payable for any other period that
is shorter or longer than a full quarterly dividend period shall be computed on
the basis of a 360-day year consisting of twelve 30-day months. Holders of
shares of Series A Preferred Stock shall not be entitled to receive any
dividends, whether payable in cash or otherwise, which are in excess of the
cumulative dividends provided for herein. Accrued but unpaid dividends shall not
bear interest.

(c) Except as otherwise set forth in this Section (c), so long as any shares of
the Series A Preferred Stock are outstanding, no dividends (other than those
paid in Junior Securities) shall be paid or declared and set apart for payment
and no other distribution shall be made upon the Junior Securities, nor shall
any Junior Securities be redeemed, purchased or otherwise acquired for any
consideration (or any monies be paid to or made available for a sinking fund for
the redemption of any shares of any such Junior Securities) by the Corporation
(except by conversion into or exchange for Junior Securities) unless, in each
case, such action was approved in advance pursuant to clause (iv) of Section 9
and all accumulated and unpaid dividends (whether or not declared) on all
outstanding shares of the Series A Preferred Stock shall have been paid,
including for the entire period in which such dividend or distribution occurs,
and a sufficient number of shares of Common Stock shall have been set apart for
the conversion of the Series A



                                       3
<PAGE>   4

Preferred Stock, including as a result of any anti-dilution adjustment resulting
from any such dividend or distribution.

(d) For purposes of the Series A Preferred Stock, the amount of dividends which
"accrue" on any share of Series A Preferred Stock as of any date shall be
calculated as the amount of any unpaid dividends accrued thereon to and
including the immediately preceding Quarterly Dividend Payment Date, plus an
amount calculated on the basis of the annual dividend rate fixed for the shares
of Series A Preferred Stock for the period after such immediately preceding
Quarterly Dividend Payment Date to and including the date as of which the
calculation is made.

Section 4. Liquidation Preference.

(a) In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary (any such event, including the
events described in subsection 4(c) below, a "Liquidation Event"), the holders
of Series A Preferred Stock shall be entitled to receive for each outstanding
share of Series A Preferred Stock, prior and in preference to any distribution
of any of the assets of the Corporation to the holders of Junior Securities by
reason of their ownership thereof, an amount per share equal to the Liquidation
Preference (as defined in Section 4(d)). If upon the occurrence of any
Liquidation Event, the assets and funds distributed among the holders of the
Series A Preferred Stock shall be insufficient to permit the payment to such
holders of the full Liquidation Preference, then the entire assets and funds of
the Corporation legally available for distribution shall be distributed ratably
among the holders of the Series A Preferred Stock in proportion to the
preferential amount each such holder is otherwise entitled to receive and no
liquidation payments shall be made to the holders of Junior Securities.

(b) After all of the distributions described in subsection (a) above have been
paid, the remaining assets of the Corporation available for distribution to
stockholders shall be distributed among the holders of Common Stock pro rata
based on the number of shares of Common Stock held by each.

(c) At the option of each holder of shares of Series A Preferred Stock then
outstanding, (i) the sale, conveyance or disposition in one or a series of
transactions of all or substantially all of the assets of the Corporation or any
of its significant subsidiaries (as determined by under Rule 1-02(w) of
Regulation S-X under the Securities Act of 1933 (the "Securities Act") and the
Securities Exchange Act of 1934 (the "Exchange Act"), as each may be amended or
any successor act



                                       4
<PAGE>   5

thereto), or any transaction that is subject to Rule 13e-3 of the Exchange Act,
(ii) the consummation of a transaction by which any Person or Group (as each is
defined below), other than a Permitted Holder (as defined below), is or becomes
the beneficial owner, directly or indirectly, of 50% or more of the securities
issued by the Corporation having the power to vote (measured by voting power
rather than number of shares) in the election of directors (the "Voting Stock")
of the Corporation, (iii) during any period of two consecutive years, the
Continuing Directors (as defined below) cease for any reason to constitute a
majority of the Board of Directors of the Corporation, or (iv) the
consolidation, merger or other business combination of the Corporation with or
into any other Person or Persons (other than (a) a consolidation, merger or
other business combination in which holders of the Corporation's Voting Stock
immediately prior to the transaction continue after the transaction to hold,
directly or indirectly, the same relative percentage of the Voting Stock as
before any such transaction and the Voting Stock of the surviving entity or
entities necessary to elect a majority of the members of the board of directors
(or their equivalent if other than a corporation) of such entity or entities,
including pursuant to a holding company merger effected under Section 251(g) of
the Delaware General Corporation Law or any successor provision, or (b) pursuant
to a migratory merger effected solely for the purpose of changing the
jurisdiction of incorporation of the Corporation), any of such events referred
to in (i) through (iv) above, a "Change of Control Event", the shares of Series
A Preferred Stock held by such holder shall be either: (x) treated as a
Liquidation Event pursuant to which the Corporation shall be required to
distribute upon consummation of and as a condition to such transaction an amount
equal to the greater of (1) the Liquidation Preference or (2) the consideration
which would have been payable if such shares of Series A Preferred Stock were
converted into shares of Common Stock immediately prior to the consummation of
such transaction (whether or not such shares of Series A Preferred Stock were or
are convertible as of such date), (y) treated pursuant to Section 6(c)(v)
hereof, or (z) sold pursuant to Section 5(b) hereof. "Person" shall mean any
individual, corporation, limited liability company, partnership, joint venture,
association, trust or other entity or organization. "Group" shall be a group of
Persons with the meaning thereof under Section 13(d)(3) of the Exchange Act and
the rules and regulations promulgated thereunder. "Continuing Directors" shall
mean individuals who at the beginning of the period of determination constituted
the Board of Directors, together with any new directors whose election by the
Board of Directors or whose nomination for election by the stockholders of the
Corporation was approved by a vote of a majority of the Board of Directors then
still in office who were either directors at the beginning of such period.
"Permitted Holder" shall mean any of Capital Z Financial Services Fund II, L.P.,
Capital Z Financial Services Private Fund II, L.P., Capital Z Management LLC,




                                       5
<PAGE>   6

Specialty Finance Partners, and any of their partners, affiliates or successors.
Any amount payable pursuant to this section 4(c) shall be payable in cash,
securities or other assets in the same proportion as such cash, securities or
other assets constitute consideration payable to the holders of the Common Stock
in such transaction.

(d) For purposes hereof, the "Liquidation Preference" with respect to a share of
Series A Preferred Stock shall mean, from time to time, an amount equal to the
product of (a) 1.05, multiplied by (b) the then applicable "Current Value Per
Share", which shall equal the sum of (i) the then applicable Stated Value Per
Share, plus (ii) accrued but unpaid dividends, whether or not declared by the
Corporation's Board of Directors, with respect to which no Adjustment has been
made.

Section 5. Redemption.  The Series A Preferred Stock shall be redeemable as
follows:

(a) Optional Redemption.

         (i) Timing and Amount. The shares of Series A Preferred Stock will be
         redeemable for cash commencing on and after March 31, 2004, at the
         option of the Corporation, subject to the notice provisions described
         below, in whole or in part, at any time or from time to time out of
         funds legally available therefor, at a price per share of Series A
         Preferred Stock on the day of redemption equal to the product of (a)
         the Applicable Percentage (as defined below), multiplied by (b) the
         then Current Value Per Share (the "Redemption Price"). The "Applicable
         Percentage" shall initially be 120% and shall decline to 105% on a
         quarterly basis over the two year period ending March 31, 2006, as
         follows:

                       Period                             Applicable Percentage
                       ------                             ---------------------

         March 20, 2004 through June 30, 2004                    118.333%
         July 1, 2004 through September 30, 2004                 116.666%
         October 1, 2004 through December 31, 2004               115.000%
         January 1, 2005 through March 31, 2005                  113.333%
         April 1, 2005 through June 30, 2005                     111.666%
         July 1, 2005 through September 30, 2005                 110.000%
         October 1, 2005 through December 31, 2005               108.333%
         January 1, 2006 through March 20, 2006                  106.666%
         On and after March 21, 2006                             105.000%



                                       6
<PAGE>   7

         (ii) Partial Redemption. If fewer than all the outstanding shares of
         Series A Preferred Stock are to be redeemed pursuant to the first
         paragraph of this Section 5, the shares to be redeemed shall be
         redeemed pro rata from the holders of Series A Preferred Stock in
         proportion to the number of shares of Series A Preferred Stock held by
         such holders (with fractional shares being rounded to the nearest whole
         share; it being understood that one-half or greater of a share being
         rounded upward). If fewer than all the shares of Series A Preferred
         Stock represented by any certificates are redeemed, a new certificate
         shall be issued representing the unredeemed shares without any cost to
         the holder thereof.

         (iii) Notice of Redemption. In the event the Corporation shall exercise
         its option to redeem shares of Series A Preferred Stock pursuant to
         this Section 5(a) or shall be obligated to redeem shares of Series A
         Preferred Stock pursuant to Section 5(d), notice of such redemption
         shall be given by courier or first class mail, postage prepaid, at
         least 30 but no more than 60 days prior to the redemption date, to each
         holder's address as the same appears on the stock records of the
         Corporation. Each such notice shall state: (1) the redemption date, (2)
         the number of shares of Series A Preferred Stock to be redeemed and, if
         less than all the shares held by such holder are to be redeemed, the
         number of such shares to be redeemed from such holder, (3) the
         Redemption Price, (4) the place or places where certificates for such
         shares are to be surrendered for payment of the Redemption Price, (5)
         that dividends on the shares to be redeemed shall cease to accrue on
         such redemption date and (6) that the Series A Preferred Stock will
         remain convertible into shares of Common Stock at any time and from
         time to time prior to the redemption date and the then applicable
         number of shares of Common Stock into which the Series A Preferred
         Stock are convertible. Notice having been mailed as aforesaid, on and
         after the redemption date, provided that the Redemption Price has been
         duly paid, (i) dividends shall cease to accrue on the Series A
         Preferred Stock so called for redemption, (ii) such shares of Series A
         Preferred Stock so called for redemption shall no longer be deemed to
         be outstanding, and (iii) all rights of the holders of such shares of
         Series A Preferred Stock so called for redemption shall cease except
         the right to receive the Redemption Price, upon surrender of the
         certificates evidencing such shares.



                                       7
<PAGE>   8

(b) Redemption Upon a Change of Control Event.

         (i) Timing and Amount. In the event there occurs a Change of Control
         Event in which all or a portion of the consideration payable to the
         holders of the Corporation's Common Stock is other than cash and any
         holder of shares of outstanding Series A Preferred Stock has not
         already elected to treat its shares of Series A Preferred Stock
         otherwise pursuant to Section 4(c), the Corporation or its successor
         (or its ultimate parent, in either case, the "Successor") shall offer
         to purchase from each holder all of the Series A Preferred Stock held
         by such holder for an amount in cash equal to the then current
         Liquidation Preference of the shares of Series A Preferred Stock held
         by the holder (the "Change of Control Redemption Price"), by delivery
         of a notice of such offer (a "Change of Control Redemption Offer")
         within five business days following the Change of Control Event. Upon a
         Change of Control Event, each holder of Series A Preferred Stock shall
         have the right (but not the obligation) to require the Corporation or
         its Successor to purchase any or all of the Series A Preferred Stock
         held by such holder for an amount in cash equal to the Change of
         Control Redemption Price; it being understood that, as a condition to
         the consummation of any such Change of Control Event, the Corporation
         and any Successor shall have agreed to satisfy the obligations to the
         holders of Series A Preferred Stock under this Section 5(b). Each
         holder of Series A Preferred Stock shall also be permitted, until the
         fifth business day following a Change of Control Event, to convey all,
         and not less than all, of the shares of Series A Preferred Stock held
         by such holder to the Corporation or its Successor. In the event that
         any holder does not elect to convert or redeem such holder's shares of
         Series A Preferred Stock pursuant to the foregoing sentence, such
         holder shall retain any rights it has hereunder with respect to such
         Change of Control Event, including to convert or redeem its shares of
         Series A Preferred Stock in connection with any subsequent Change of
         Control Event.

         (ii) Notice of Change of Control Event. Within five business days
         following a Change of Control Event, the Corporation or its Successor
         shall give notice by mail to each holder of Series A Preferred Stock,
         at such holder's address as it appears on the transfer books of the
         Corporation, of such Change of Control Event, which notice shall set
         forth each holder's right to require the Corporation to redeem all, but
         not less than all, shares of Series A Preferred Stock held by it, the
         redemption date (which date shall be no more than 30 business days
         following the date of such mailed notice), and the procedures to be
         followed by such holder in exercising its right to cause such
         redemption. In the event a record holder of shares of



                                       8
<PAGE>   9

         Series A Preferred Stock shall elect to require the Corporation or its
         Successor to redeem all such shares of Series A Preferred Stock
         pursuant to Section 5(b)(i), such holder shall deliver within 20
         business days of the mailing to it of the Corporation's notice
         described in this Section 5(b)(ii), a written notice to the Corporation
         or its Successor so stating, specifying the number of shares to be
         redeemed pursuant to Section 5(b)(i). The Corporation or its Successor
         shall, in accordance with the terms hereof, redeem the number of shares
         so specified on the date fixed for redemption. Failure of the
         Corporation to give any notice required by this Section 5(b)(ii), or
         the formal insufficiency of any such notice, shall not prejudice the
         rights of any holders of shares of Series A Preferred Stock to cause
         the Corporation or its Successor to redeem all such shares held by
         them. Notwithstanding the foregoing, the Board of Directors of the
         Corporation may modify any offer pursuant to this Section 5(b)(ii) to
         the extent necessary to comply with any applicable provisions of the
         Exchange Act, and the rules and regulations thereunder, including
         Section 14(e) and Rule 14e-1 thereof, but no such provisions or
         modifications shall in any way negate the obligation of the Corporation
         or its Successor to purchase shares of Series A Preferred Stock under
         this Section 5(b).

         If the Corporation shall fail to comply with any of the provisions of
this Section 5 (other than the timely giving of a notice pursuant to Section
5(b)(ii)), then in any such event, the Dividend Rate shall be increased by an
amount equal to the Default Rate (as defined below) during the period in which
such failure shall be continuing.

(c) Mandatory Redemption. To the extent permitted by law, as a mandatory
redemption for retirement of the shares of Series A Preferred Stock, the
Corporation shall redeem, out of funds legally available therefor (as such
shares remain outstanding) on the fifth anniversary of the Issue Date (the
"Mandatory Redemption Date") for cash at a price per share of Series A Preferred
Stock equal to the product of (a) 105%, multiplied by (b) the then Current Value
Per Share, all remaining shares of Series A Preferred Stock then outstanding,
provided, that shares of Series A Preferred Stock shall remain convertible into
Common Stock up to and including the redemption date. If the Corporation shall
fail to discharge its obligation to redeem all of the outstanding shares of
Series A Preferred Stock required to be redeemed pursuant to this Section 5(c)
(the "Mandatory Redemption Obligation"), the Mandatory Redemption Obligation
shall be discharged as soon as the Corporation is able to discharge such
Mandatory Redemption Obligation. If and so long as the Mandatory Redemption
Obligation shall not be fully discharged,




                                       9
<PAGE>   10

(i) dividends on the Series A Preferred Stock shall continue to accrue and be
added to the Stated Value Per Share at the rate of fifteen percent (15.00%) per
annum (the "Default Rate") of the then Current Value per Share until such
Mandatory Redemption Obligation is fully discharged, and (ii) the Corporation
shall not declare or pay any dividend or make any distribution on, nor may it
redeem, repurchase or otherwise acquire or discharge any redemption, sinking
fund or other similar obligation in respect of any of, its securities.

(d) Deposit. At any time after a notice of redemption shall have been mailed
and, if applicable, as a condition to, and concurrently with, the consummation
of the Change of Control Event to which such notice relates, the Corporation or
its Successor shall deposit for the benefit of the holders of the Series A
Preferred Stock called for redemption or that may be repurchased in connection
with the redemption or repurchase event described in this Section 5 to which
such notice relates, the funds necessary for such redemption or repurchase with
a bank or trust company doing business in the Borough of Manhattan, the City of
New York, and having a capital and surplus of at least $1,000,000,000. Any
interest allowed on moneys so deposited shall be paid to the Corporation. Upon
the deposit of such funds or, if no such deposit is made, upon the date fixed
for redemption (unless the Corporation shall default in making payment of the
appropriate redemption amount), whether or not certificates for shares so called
for redemption have been surrendered for cancellation, the shares of Series A
Preferred Stock to be redeemed shall be deemed to be no longer outstanding and
the holders thereof shall cease to be stockholders with respect to such shares
and shall have no rights with respect thereto, except for the rights to receive
the amount payable upon redemption, but without interest, and, up to the close
of business on the date immediately preceding the date fixed for such
redemption, the right to convert such shares pursuant to Section 6 hereof. Such
deposit in trust shall be irrevocable except that any funds deposited by the
Corporation which shall not be required for the redemption for which they were
deposited because of the exercise of conversion rights shall be returned to the
Corporation forthwith, and any funds deposited by the Corporation which are
unclaimed at the end of one year from the date fixed for such redemption shall
be paid over to the Corporation upon its request, and upon such repayment the
holders of the shares of Series A Preferred Stock so called for redemption shall
look only to the Corporation or its Successor for payment of the appropriate
amount. Any such unclaimed amounts paid over to the Corporation shall, for a
period of six years from the date fixed for such redemption, be set apart and
held by the corporation in trust for the benefit of the holders of such shares
of Series A Preferred Stock, but no such holder shall be entitled to interest
thereon. At the expiration of such six-year period, all right, title, interest
and claim of such holders in or to such unclaimed amounts



                                       10
<PAGE>   11

shall be extinguished, terminated and discharged, and such unclaimed amounts
shall become part of the general funds of the Corporation free of any claim of
such holders.

Section 6. Conversion. The Series A Preferred Stock shall be convertible into
Common Stock as follows:

(a) Optional Conversion. Each share of Series A Preferred Stock shall be
convertible commencing on and after the "Initial Conversion Date" which shall be
the date on which the Corporation's stockholders have approved the conversion
provisions of this Section 6(a) and the issuance of Common Stock hereunder. If
the Initial Conversion Date has not occurred by June 23, 2001, dividends on the
Series A Preferred Stock shall continue to accrue and be added to the Stated
Value Per Share at the rate of twelve percent (12.00%) per annum of the then
Current Value Per Share until such Initial Conversion Date. Within three (3)
business days of the Initial Conversion Date, the Corporation shall provide
written notice to the holders of record of the Series A Preferred Stock that
such Initial Conversion Date has occurred. After the Initial Conversion Date,
each share of Series A Preferred Stock is convertible at the option of the
holder thereof, at any time and from time to time, into the number of fully paid
and non-assessable shares of Common Stock of the Corporation as is determined by
dividing (a) the Current Value Per Share by (b) the Conversion Price (as
hereinafter defined) in effect at the time of conversion (such conversion, an
"Optional Conversion").

(b) Conversion Price. The conversion price (the "Conversion Price") shall
initially be $3.50, subject to adjustment from time to time in accordance with
Section 6(c).

(c) Adjustments to the Conversion Price. The Conversion Price shall be subject
to adjustment from time to time as follows:

         (i) Adjustment Upon Dilutive Financing. If (a) the Corporation shall,
         at any time, issue any (x) shares of Common Stock, or (y) options or
         warrants to purchase or rights to subscribe for Common Stock,
         securities by their terms convertible into or exercisable or
         exchangeable for Common Stock, or options to purchase or rights to
         subscribe for such convertible, exercisable or exchangeable securities
         (any of the foregoing referred to in this clause (y), "Common Stock
         Equivalents") (other than, in each case, Excluded Securities (as
         defined below) or an issuance for which the adjustment provided for in
         subsections 6(c)(iii), (iv), or (v) applies), and


                                       11
<PAGE>   12

         (b) the Corporation has not reported in its financial statements in any
         quarterly or annual report on Form 10-Q or Form 10-K filed pursuant to
         its reporting obligations under the Exchange Act positive Cash Flow (as
         defined in Section 6(e) below) for any two consecutive fiscal quarters
         (assuming a calendar year fiscal year) prior to such issuance, then a
         "Potentially Dilutive Financing" shall have occurred and the Conversion
         Price may be adjusted pursuant to this Section 6(c)(i) as follows:

         (A) If the aggregate consideration received or deemed received by the
         Corporation (as calculated in accordance with Section (6)(c)(ii) below,
         the "Proceeds") in respect of the Potentially Dilutive Financing,
         together with the Proceeds received or deemed received by the
         Corporation in respect of any such prior Potentially Dilutive
         Financing(s) (collectively, the "Dilutive Transactions"), is less than
         or equal to $5,000,000, no adjustment to the Conversion Price shall be
         made pursuant to this subsection 6(c)(i).

         (B) If the Proceeds from the Dilutive Transactions equal or exceed
         $5,000,000, but are less than or equal to $10,000,000, the then
         applicable Conversion Price shall be reduced (but not increased) to the
         greater of (x) the Minimum Conversion Price (as defined in Section 6(e)
         below) or (y) the net volume-weighted average purchase price per share
         (as calculated in accordance with Section 6(c)(ii)(D)) of the Common
         Stock and/or Common Stock Equivalents issued in the Dilutive
         Transactions (excluding from the calculation of (y) any shares issued
         as a result of the exercise of any preemptive rights under Section 10
         hereof).

         (C) If the Proceeds from the Dilutive Transactions exceed $10,000,000,
         the then applicable Conversion Price shall be adjusted (either reduced
         or increased) to the greater of (x) the Minimum Conversion Price or (y)
         the net volume-weighted average purchase price per share (as calculated
         in accordance with Section 6(c)(ii)(D)) (excluding from the calculation
         of (y) any shares issued as a result of the exercise of any preemptive
         rights under Section 10 hereof) of the Common Stock and/or Common Stock
         Equivalents issued in any Dilutive Transaction or series of Dilutive
         Transactions with Proceeds equal to any $10,000,000 that would yield
         the lowest net volume-weighted average purchase price per share;
         provided, however, that if the result of this clause (y) shall result
         in the Conversion Price being adjusted to a price per share in excess
         of the


                                       12
<PAGE>   13

         Maximum Conversion Price (as defined in Section 6(e) below), the result
         of this clause (y) shall equal the Maximum Conversion Price.

                  An example of the application of the above provisions in three
         successive transactions is as follows:

                  Assume in "Transaction 1" the Corporation issues 2 million
                  shares of Common Stock for 3.00 per share or total
                  consideration of $6 million, in "Transaction 2" the
                  Corporation issues 1 million shares of Common Stock for $1.85
                  per share or total consideration of $1,850,000 and in
                  "Transaction 3" the Corporation issues 1 million shares of
                  Common Stock for $5.00 per share or total consideration of $5
                  million. Further assume that none of such shares were Excluded
                  Securities. The Conversion Price would be adjusted to (i)
                  $3.00 after Transaction 1 (pursuant to (B) above), (ii) $2.62
                  after Transaction 2 (pursuant to (B) above), and (iii) $2.92
                  after Transaction 3 (pursuant to (C) above).

         (ii) Adjustment Calculation Provisions. For the purposes of calculating
         any adjustment of a Conversion Price pursuant to paragraph (i) above,
         the following provisions shall be applicable:

         (A) In the case of the issuance of Common Stock and/or Common Stock
         Equivalents for cash in a public offering or private placement, the
         consideration to be included in the definition of "Proceeds" above
         shall be deemed to be the amount of cash paid therefor before deducting
         therefrom any discounts, commissions or placement fees payable by the
         Corporation to any underwriter or placement agent in connection with
         the issuance and sale thereof.

         (B) In the case of the issuance of Common Stock and/or Common Stock
         Equivalents for a consideration in whole or in part other than cash,
         the consideration other than cash to be included in the definition of
         "Proceeds" above, shall be deemed to be the fair market value thereof
         as determined in good faith by the Board of Directors of the
         Corporation and consistent with amounts contained in its audited
         financial statements or as verified by an independent valuation expert.

         (C) In the case of the issuance of options or warrants to purchase or
         rights to subscribe for Common Stock, securities by


                                       13
<PAGE>   14

         their terms convertible into or exercisable or exchangeable for Common
         Stock, or options or warrants to purchase or rights to subscribe for
         such convertible or exchangeable securities:

                  (1) the aggregate maximum number of shares of Common Stock
                  deliverable upon exercise of such convertible or exchangeable
                  securities shall be deemed to have been issued and outstanding
                  at the time such convertible or exchangeable securities were
                  issued and for a consideration, which shall be included in the
                  definition of "Proceeds" above, equal to the consideration
                  (determined in the manner provided in paragraphs (A) and (B)
                  above), if any, received by the Corporation upon the issuance
                  of such convertible or exchangeable securities plus the
                  additional consideration, if any, to be received by the
                  Corporation upon the conversion or exchange of such securities
                  or the exercise of any related options or rights (the
                  consideration in each case to be determined in the manner
                  provided in paragraphs (A) or (B) above);

                  (2) the aggregate maximum number of shares of Common Stock
                  deliverable upon exercise of such options, warrants or rights
                  shall be deemed to have been issued and outstanding as of the
                  record date fixed by the Corporation for the issuance of such
                  options, warrants or rights and for a consideration, which
                  shall be included in the definition of "Proceeds" above, equal
                  to the consideration (determined in the manner provided in
                  paragraphs (A) and (B) above), if any received by the
                  Corporation upon the issuance of such options, warrants or
                  rights, plus the consideration, if any, to be received by the
                  Corporation upon the exercise of such options, warrants or
                  rights (determined in the manner provided in paragraphs (A)
                  and (B) above);

                  (3) on any change in the number of shares of Common Stock
                  deliverable upon exercise of any such options, warrants or
                  rights or conversions of or exchanges for such securities
                  (including, as a result of any amendment to the conversion or
                  exercise price), other than a change resulting from the
                  anti-dilution provisions thereof, the applicable Conversion
                  Price shall forthwith be readjusted to such Conversion Price
                  as would have been obtained had the adjustment been made upon
                  the original issuance of such options, warrants or rights or
                  such convertible or exchangeable securities which were not
                  exercised or converted prior to such adjustment; and


                                       14
<PAGE>   15

                  (4) no further adjustment of the Conversion Price adjusted
                  upon the issuance of any such options, warrants or rights or
                  such convertible or exchangeable securities shall be made as a
                  result of the actual issuance of Common Stock on the exercise
                  of any such rights, warrants or options or any conversion or
                  exchange of any such securities.

                  (5) In calculating the "net volume-weighted average purchase
                  price per share," but only for such specific purpose,
                  discounts, commissions or placement fees, along with any legal
                  fees payable by the Corporation to counsel for the investors
                  in such transaction, underwriters or placement agents in such
                  transaction shall be deducted from the aggregate Proceeds
                  received by the Corporation in such transaction.

                  (6) For purposes of Section 6(c)(i)(B), volume-weighted
                  average purchase price per share shall be equal to the
                  quotient of the Proceeds (subject to Section 6(c)(ii)(D)(1))
                  from the Dilutive Transactions for which the determination is
                  being made divided by the number of shares of Common Stock
                  issued or issuable (also assuming the conversion or exercise
                  of all Common Stock Equivalents) in connection with such
                  Dilutive Transactions. For purposes of Section 6(c)(i)(C),
                  volume-weighted average purchase price shall be equal to the
                  quotient of $10,000,000 (subject to Section 6(c)(ii)(D)(1))
                  divided by the number of shares of Common Stock issued or
                  issuable (also assuming the conversion or exercise of all
                  Common Stock Equivalents) in connection with all of the
                  Dilutive Transactions (which may include any portion of a
                  Dilutive Transaction) used in calculating the $10,000,000 of
                  Proceeds.

         (iii) Adjustment Upon Stock Dividends, Subdivisions or Splits. If, at
         any time, the number of shares of Common Stock outstanding is increased
         by a stock dividend payable in shares of Common Stock or by a
         subdivision or split-up of shares of Common Stock, then, following the
         record date for the determination of holders of Common Stock entitled
         to receive such stock dividend, or to be affected by such subdivision
         or split-up, the Conversion Price shall be appropriately decreased so
         that the number of shares of Common Stock issuable on conversion of
         Series A Preferred Stock shall be increased in proportion to such
         increase in outstanding shares.



                                       15
<PAGE>   16

         (iv) Adjustment Upon Combinations. If, at any time, the number of
         shares of Common Stock outstanding is decreased by a combination of the
         outstanding shares of Common Stock into a smaller number of shares of
         Common Stock, then, following the record date to determine shares
         affected by such combination, the Conversion Price shall be
         appropriately increased so that the number of shares of Common Stock
         issuable on conversion of each share of Series A Preferred Stock shall
         be decreased in proportion to such decrease in outstanding shares.

         (v) Adjustment Upon Reclassifications, Reorganizations, Consolidations
         or Mergers. If, at any time when Series A Preferred Stock is issued and
         outstanding, there shall be any merger, consolidation, share exchange,
         recapitalization, reorganization, business combination, or other
         similar event or other Change of Control Event, as a result of which
         shares of Common Stock shall be changed into the same or a different
         number of shares of another class or classes of stock or securities of
         the Corporation or another Person, or in case of any sale or conveyance
         of all or substantially all of the assets of the Corporation (other
         than an event that is treated as a Liquidation Event under Section 4
         hereof) (each a "Change of Control Transaction"), then, subject to the
         rights of a holder of Series A Preferred Stock under Section 4 and
         under Section 5(b) hereof, the holders of any Series A Preferred Stock
         shall thereafter have the right to receive upon conversion of the
         Series A Preferred Stock, upon the basis and upon the terms and
         conditions specified herein and in lieu of the shares of Common Stock
         immediately theretofore issuable upon conversion, such stock,
         securities, cash or other assets which the holders of Series A
         Preferred Stock would have been entitled to receive in such transaction
         had the Series A Preferred Stock been converted in full immediately
         prior to such transaction (without regard to any limitations on
         conversion contained herein), and in any such case appropriate
         provisions shall be made with respect to the rights and interests of
         the holders of Series A Preferred Stock to the end that the provisions
         hereof (including, without limitation, provisions for adjustment of the
         applicable Conversion Price and of the number of shares of Common Stock
         issuable upon conversion of the Series A Preferred Stock) shall
         thereafter be applicable, as nearly as may be practicable in relation
         to any securities or assets thereafter deliverable upon the conversion
         of the Series A Preferred Stock. The Corporation shall not effect any
         transaction described in this subsection (v) unless (a) it first gives
         ten (10) business days prior written notice of the record date of the
         special meeting of stockholders to approve, or if there is no such
         record date, the consummation of, such merger,



                                       16
<PAGE>   17

         consolidation, share exchange, recapitalization, reorganization,
         business combination or other similar event or other Change of Control
         Event (during which time the holders of Series A Preferred Stock shall
         be entitled to convert the Series A Preferred Stock) and (b) the
         resulting ultimate Successor or acquiring Person (if not the
         Corporation) and, if an entity different from the Successor or
         acquiring entity, the entity whose capital stock or assets the holders
         of the Common Stock are entitled to receive as a result of such Change
         of Control Transaction, assumes by written instrument the obligations
         of this Certificate of Designation including this subsection (v). The
         above provisions shall similarly apply to successive mergers,
         consolidations, share exchanges, recapitalizations, reorganizations,
         business combinations or other similar events or sales of assets.

         (vi) Deferral in Certain Circumstances. In any case in which the
         provisions of this Section 6(c) shall require that an adjustment shall
         become effective immediately after a record date of an event, the
         Corporation may defer until the occurrence of such event issuing to the
         holder of any share of Series A Preferred Stock converted after such
         record date and before the occurrence of such event the shares of
         capital stock issuable upon such conversion by reason of the adjustment
         required by such event and issuing to such holder only the shares of
         capital stock issuable upon such conversion before giving effect to
         such adjustments; provided, however, that the Corporation shall deliver
         to such holder an appropriate instrument or due bills evidencing such
         holder's right to receive such additional shares.

         (vii) Exceptions. Section 6(c) shall not apply to (1) any issuance of
         securities by the Corporation to employees, officers, consultants or
         directors pursuant to the Corporation's employee benefit plans in the
         ordinary course of business, (2) any issuance of securities by the
         Corporation pursuant to the conversion or exercise of any securities of
         the Corporation issued and outstanding on or as of March 20, 2001,
         including the Series A Preferred Stock, (3) any issuance of securities
         by the Corporation pursuant to anti-dilution conversion or exercise
         price adjustments pursuant to this Certificate, (4) any issuance of
         securities pursuant to the terms of the revolving credit facilities and
         ancillary transaction documents with Federal Home Loan Mortgage
         Corporation and The Union Labor Life Insurance Corporation (together,
         the "Credit Facilities"), executed on or prior to the Issue Date (not
         including any securities issued as a result of any amendment to any
         such document after the date hereof), (5) any issuance of securities by
         the Corporation to business partners, in transactions approved by the
         Board



                                       17
<PAGE>   18

         of Directors of the Corporation, the principal objective of which is
         other than raising capital, and (6) any issuance of Series A Preferred
         Stock at the Class 2 Closing (as such term is defined in the Series A
         8% Convertible Preferred Stock Purchase Agreement, dated as of March 7,
         2001) (collectively, the "Excluded Securities").

         (viii) Notice of Adjustment of Conversion Price. Whenever the
         Conversion Price is adjusted as herein provided: (1) the Corporation
         shall compute the adjusted Conversion Price in accordance with this
         Section 6(c) and shall prepare a certificate signed by the Treasurer or
         Chief Financial Officer of the Corporation setting forth the adjusted
         Conversion Price and showing in reasonable detail the facts upon which
         such adjustment is based, and such certificate shall forthwith be filed
         at each office or agency maintained for such purpose of conversion of
         shares of Series A Preferred Stock; and (2) a notice stating that the
         Conversion Price has been adjusted and setting forth the adjusted
         Conversion Price shall forthwith be prepared by the Corporation, and as
         soon as practicable after it is prepared, such notice shall be mailed
         by the Corporation at its expense to all holders of the Series A
         Preferred Stock at their last addresses as they shall appear in the
         stock register.

         (ix) Conversion Mechanics. At the time of any conversion of Series A
         Preferred Stock into Common Stock, each Series A Preferred Stock shall
         be converted on the Conversion Date (as defined below) to that number
         of shares of Common Stock determined by dividing the Current Value Per
         Share by the Conversion Price, as in effect at the time of conversion.

         (x) In order for a holder of Series A Preferred Stock to receive shares
         of Common Stock for the conversion of Series A Preferred Stock, such
         holder shall surrender the certificate or certificates representing
         such shares of Series A Preferred Stock at the office of the transfer
         agent for the Series A Preferred Stock, together with a written notice.
         Such notice shall state such holder's name or the names of the nominees
         in which such holder wishes the certificate or certificates for shares
         of Common Stock to be issued and, shall state the number of shares of
         the Series A Preferred Stock represented by such certificate or
         certificates that are to be converted. If required by the Corporation,
         certificates surrendered for conversion shall be endorsed or
         accompanied by a written instrument or instruments of transfer, in form
         satisfactory to the Corporation, duly executed by the registered holder
         or its attorney duly authorized in writing. The



                                       18
<PAGE>   19

         "Conversion Date" shall be the date of receipt of such certificates and
         notice by the transfer agent. The Corporation shall, as soon as
         practicable after the Conversion Date, issue and deliver to such
         holder, or to its nominee, at such holder's address as shown in the
         records of the Corporation, a certificate or certificates for the
         number of shares of Common Stock issuable upon such conversion in
         accordance with the provisions hereof, rounded to the nearest share
         (with one-half or greater being rounded upward). If less than all of
         the shares of Series A Preferred Stock represented by a stock
         certificate are converted into shares of Common Stock, the Corporation
         shall issue a new stock certificate in the amount of the shares not so
         converted.

         (xi) No fractional shares of Common Stock shall be issued upon
         conversion of shares of Series A Preferred Stock and any fractional
         share to which the holder would otherwise be entitled shall be rounded
         to the nearest whole number (with one-half or greater being rounded
         upward).

         (xii) All shares of Series A Preferred Stock which shall have been
         surrendered for conversion shall no longer be deemed to be outstanding,
         and all rights with respect to such shares shall immediately cease and
         terminate on the Conversion Date, except only the right of the holders
         thereof to receive shares of Common Stock in exchange therefor and the
         payment of any declared and unpaid dividends thereon. On the Conversion
         Date, the shares of Common Stock issuable upon such conversion shall be
         deemed to be outstanding, and the holder thereof shall be entitled to
         exercise and enjoy all rights with respect to such shares of Common
         Stock. All shares of Series A Preferred Stock tendered for conversion
         shall, from and after the Conversion Date, be deemed to have been
         retired and canceled and shall not be reissued as Series A Preferred
         Stock, and the Corporation may thereafter take such appropriate action
         as may be necessary to reduce accordingly the authorized number of
         shares of Series A Preferred Stock.

(d) Certain Definitions. As used in this Section 6, the following terms shall
have the following respective meanings:

                  "Consolidated Net Income" means, for any period, the
         consolidated net income (or loss) of the Corporation and its
         subsidiaries determined in accordance with GAAP; provided, however,
         that there shall not be included in such Consolidated Net Income:



                                       19
<PAGE>   20

         (i) any net income of any person acquired by the Corporation or a
         subsidiary in a pooling of interests transaction for any period prior
         to the date of such acquisition;

         (ii) any gain realized upon the sale or other disposition of any assets
         of the Corporation or any subsidiary (including pursuant to any
         sale-and-leaseback arrangement) which is not sold or otherwise disposed
         of in the ordinary course of business and any gain realized upon the
         sale or other disposition of any capital stock of any person;

         (iii) extraordinary gains or losses (but only non-cash losses) and
         other non-recurring gains or losses (but only non-cash losses) not
         otherwise included in extraordinary gains (including the cumulative
         effect of any dispositions of assets or investments or changes in
         accounting principles).

                  "Cash Flow" for any period means the sum of Consolidated Net
         Income, plus the following to the extent deducted in calculating such
         Consolidated Net Income:

         (i) non-cash interest expenses, except, if pursuant to the terms of the
         agreement, document or instrument pursuant to which such non-cash
         interest expense is incurred by the Corporation, interest under any
         such agreement, document or instrument will be required to be paid in
         cash within two (2) years of the last day of the fiscal quarter in
         which such non-cash interest is incurred by the Corporation under GAAP;

         (ii) depreciation and amortization expense of the Corporation and its
         subsidiaries (excluding amortization expense attributable to a prepaid
         operating activity item that was paid in cash in a prior period); and

         (iii) all other non-cash charges of the Corporation and its
         subsidiaries for compensation to its employees and consultants
         (attributed to options, warrants and other equity instruments); and

         (iv) all paid-in-kind dividends and other non-cash dividend or
         equity-related charges; in each case for such period determined in
         accordance with GAAP, except, if pursuant to the terms of the
         agreement, document or instrument pursuant to which any such
         paid-in-kind dividends, non-cash dividends or equity-related charges is
         incurred, accrued, or payable by the Corporation, dividends or
         equity-related charges under any such agreement, document or



                                       20
<PAGE>   21


         instrument will be required to be paid in cash within two (2) years of
         the last day of the fiscal quarter in which any such paid-in-kind
         dividends, non-cash dividends or equity-related charges are incurred,
         accrued or paid by the Corporation under GAAP.

                  "GAAP" means generally accepted accounting principles set
         forth in the opinions and pronouncements of the Accounting Principles
         Board of the American Institute of Certified Public Accountants and
         statements and pronouncements of the Financial Accounting Standards
         Board or in such other statements by such other entity as have been
         approved by a significant segment of the accounting profession, which
         are in effect from time to time.

                  "Maximum Conversion Price" means initially $3.50 per share, as
         appropriately adjusted for any adjustments for which the adjustment to
         the Conversion Price provided for in subsections 6(c)(ii),(iii), (iv)
         and (v) applies.

                  "Minimum Conversion Price" means initially $2.00 per share, as
         appropriately adjusted for any adjustments for which the adjustment to
         the Conversion Price provided for in subsections 6(c)(ii),(iii), (iv)
         and (v) applies.

Section 7. Reservation of Common Stock Issuable Upon Conversion. The Corporation
shall at all times after the Initial Conversion Date reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the shares of the Series A Preferred
Stock, such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Series A
Preferred Stock.

Section 8. Voting Rights. Except as set forth in Section 9 below or as otherwise
required under applicable law, the holder of each share of Series A Preferred
Stock shall have no voting rights until the date (the "Initial Voting Rights
Date") on which the Corporation's stockholders approve the voting rights
provisions set forth in this Section 8 that are intended to be effective after
the Initial Voting Rights Date. Within three (3) business days of the Initial
Voting Rights Date, the Corporation shall provide written notice to the holders
of record of the Series A Preferred Stock that such Initial Voting Rights Date
has occurred. After the Initial Voting Rights Date, the holder of each share of
Series A Preferred Stock shall have the right to one vote for each share of
Common Stock into which such Series A



                                       21
<PAGE>   22

Preferred Stock could then be converted, and with respect to such vote, such
holder shall have full voting rights and powers equal to the voting rights and
powers of the holders of Common Stock, and shall be entitled, to notice of any
stockholders' meeting in accordance with the Bylaws of the Corporation and the
Delaware General Corporation Law and shall be entitled to vote, together with
holders of Common Stock, with respect to any question upon which holders of
Common Stock have the right to vote. Fractional votes shall not, however, be
permitted and any fractional voting rights available on an as-converted basis
(after aggregating all shares into which shares of Series A Preferred Stock held
by each holder could be converted) shall be rounded to the nearest whole number
(with one-half or greater being rounded upward).

Section 9. Protective Provisions.

(a) So long as more than 20% of the designated shares of Series A Preferred
Stock are outstanding, the Corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law or the Corporation's
Bylaws) of the holders of not less than 68.5% of the Series A Preferred Stock
outstanding at such time, take any action that: (i) amends, modifies or repeals
(whether by merger, consolidation, recapitalization or otherwise) any provision
of the Corporation's Certificate of Incorporation or Bylaws or this Certificate
of Designations in any manner which would alter or change any of the rights,
preferences, privileges or powers of, or the restrictions provided for the
benefit of, the Series A Preferred Stock or that otherwise detracts from the
rights, powers and preferences and restrictions provided for the benefit of the
Series A Preferred Stock, (ii) increases or decreases the authorized number of
shares of Common Stock or preferred stock, (iii) authorizes, creates (by
reclassification or otherwise) or issues any new class or series of capital
stock or preferred stock (or any obligation or security convertible or
exchangeable into or evidencing the right to purchase shares of any class or
series of capital stock or preferred stock) ranking senior to or on parity with
the Series A Preferred Stock in any respect, (iv) approves or authorizes or in
any way results in the repurchase or redemption of, or the payment of dividends
or the making of any distributions on, any stock or similar equity security of
the Corporation or any security convertible or exchangeable, with or without
consideration, into or for any stock or similar security, or any security
carrying or representing any option, warrant or right to subscribe to or
purchase any stock or similar security, or any such option, warrant or right of
the Corporation (other than on the Series A Preferred Stock, and repurchases
pursuant to the Corporation's employee benefit plans) (an "Equity Security"),
(v) subjects the Corporation's assets to any mortgage, lien, security interest
or encumbrance other than (a) any mortgage,



                                       22
<PAGE>   23

lien, security interest or encumbrance imposed in connection with revolving
credit facilities or sales of accounts receivable for cash at fair market value,
in each case, as approved by the Corporation's Board of Directors, and (b)
liens, mortgages, security interests or encumbrances arising in the ordinary
course of the Corporation's business that do not materially impair the value of
the assets they encumber, (vi) approves or authorizes or in any way results in
the Corporation incurring any indebtedness for borrowed money in excess of
$10,000,000 (subject to clauses (vii) and (viii) below, excluding indebtedness
for borrowed money arising under the Credit Facilities and indebtedness for
borrowed money arising in connection with revolving credit facilities approved
by the Corporation's Board of Directors), (vii) approves or authorizes or in any
way results in the Corporation (x) issuing any debt security or instrument
representing debt of the Corporation (of any nature whatsoever) or any class or
series of capital or preferred stock or any other security that is neither
Common Stock nor convertible into nor exercisable or exchangeable for Common
Stock (any of the foregoing, a "Non-Equity Security"), or (y) entering into, or
becoming subject to, any agreement, arrangement or understanding of any kind
resulting in, or with respect to, the Corporation's incurring indebtedness
(other than payables or short-term liabilities incurred in the ordinary course
of business) (any of the foregoing, a "Debt-Type Obligation"), or any
combination of Non-Equity Securities and Debt-Type Obligations, in any single
transaction or series of related transactions, with, in any such case, an
aggregate annual interest rate, dividend rate or yield or any other type of
coupon rate or yield, as set forth in any agreement, document or instrument
governing such Non-Equity Securities and/or Debt-Type Obligations or pursuant to
which any such Non-Equity Securities and/or Debt-Type Obligations is or are to
be issued, incurred or created (any such agreement, document or instrument, the
"Governing Instrument"), that is greater than or equal to LIBOR Plus 15 (as
defined below), (viii) approves or authorizes or in any way results in the
Corporation issuing any Non-Equity Securities or entering into or becoming
subject to any Debt-Type Obligations, or any combination of Non-Equity
Securities and Debt-Type Obligations, in any single transaction or series of
related transactions, and the Governing Instrument(s) relating thereto provides
for both (x) an aggregate annual interest rate, dividend rate or yield or any
other type of coupon rate or yield, greater than or equal to LIBOR Plus 10 (as
defined below) and (y) the issuance of, or right to receive, whether as a fee or
otherwise, Equity Securities equal to, or convertible into or exercisable or
exchangeable for an aggregate of, 1,000,000 or more shares of Common Stock or
any other class or series of capital or preferred stock that is not a Non-Equity
Security (as such 1,000,000 share threshold shall be proportionately adjusted
for subdivisions or split-ups and the like of the Common Stock), or (ix)
increases the size of the Corporation's Board of Directors to greater than ten
directors. Notwithstanding the foregoing, the Corporation shall not take any



                                       23
<PAGE>   24

action that would adversely affect one holder of Series A Preferred Stock, but
not all holders of Series A Preferred Stock, without the consent of such
adversely affected holder of Series A Preferred Stock.

(b) Certain Definitions. As used in this Section 9, the following terms shall
have the following respective meanings:

                  "LIBOR" shall mean, as of any relevant date, a per annum
         interest rate equal to the six-month LIBOR (London Interbank Offered
         Rate) Rate appearing in the Money Rates table of the Wall Street
         Journal published on such date in New York City, or if not published on
         such date, the date of publication immediately prior to such date. If
         the Wall Street Journal (i) publishes more than one such rate on any
         date of publication, the lower or lowest of such rates shall apply, or
         (ii) publishes a retraction or correction of any such rate, the
         corrected rate reported in such retraction or correction shall apply.

                  "LIBOR Plus 15" shall mean LIBOR, plus 15% per annum.

                  "LIBOR Plus 10" shall mean LIBOR, plus 10% per annum.

Section 10. Preemptive Rights.

(a) Grant of Preemptive Rights. The Corporation will not sell or issue, or offer
to issue, (i) any shares of capital stock or preferred stock of the Corporation,
(ii) any securities convertible into or exercisable or exchangeable for capital
stock or preferred stock of the Corporation, or (iii) options, warrants or
rights carrying any rights to purchase or otherwise acquire capital stock or
preferred stock of the Corporation, unless the Corporation first submits a
written notice to each holder of Series A Preferred Stock identifying the terms
of the proposed sale (including price, number or aggregate principal amount of
securities and all other material terms), and offers to each holder of Series A
Preferred Stock (each an "Offeree") the opportunity to purchase its Pro Rata
Allotment (as hereinafter defined) of such securities to be sold or issued by
the Corporation (subject to increase for over-allotment if some Offerees do not
fully exercise their rights) on terms and conditions, including price, not less
favorable than those on which the Corporation proposes to sell such securities
to a third party or parties. Each Offeree's "Pro Rata Allotment" of such
securities shall equal the product of (a) the number or amount of securities to
be issued in the transaction, multiplied by (b) a fraction, the numerator of
which equals the number of shares of Series A Preferred Stock owned by such
Offeree and the denominator of which equals (x) all of the issued and



                                       24
<PAGE>   25

outstanding shares of Series A Preferred Stock, multiplied by (y) 2; in each
case as of the date of such written offer. The Corporation's offer pursuant to
this Section 10 shall remain open and irrevocable for a period of thirty (30)
days following actual receipt by the Offerees of such written notice, and an
Offeree may elect to purchase such securities so offered by giving written
notice thereof to the Corporation within such 30-day period, including therein
the maximum number of shares of capital stock or other securities of the
Corporation which the Offeree wishes to purchase, including the amount it would
purchase if one or more other Offerees do not elect to purchase hereunder, with
the rights of electing Offerees to purchase such additional amounts to be based
upon the relative holdings of shares of Common Stock (determined as aforesaid)
of the electing Offerees in the case of over-subscription. Any securities so
offered which are not purchased by the Offerees pursuant to such offer may be
sold by the Corporation, but only on the terms and conditions set forth in the
initial offer, at any time within sixty (60) days following the termination of
the above-referenced 30-day period, but may not be sold to any other Person or
on terms and conditions, including price, that are more favorable to the
purchaser than those set forth in such offer or after such 60-day period without
renewed compliance with this Section 10.

(b) Exceptions to Preemptive Rights. Notwithstanding the provisions of paragraph
(a) above, the right to receive notice and purchase securities granted under
Section 10(a) shall be inapplicable with respect to (i) any issuance of
securities by the Corporation to employees, officers, consultants or directors
by the Corporation pursuant to the Corporation's employee benefit plans in the
ordinary course of business, (ii) any issuance of securities by the Corporation
pursuant to the conversion of any securities of the Corporation issued and
outstanding as of March 20, 2001, including the Series A Preferred Stock, (iii)
underwritten public offerings of any such securities, (iv) issuances of Common
Stock under the private equity-line financing arrangement with Paul Revere
Capital Partners, Ltd. ("Paul Revere") pursuant to the Common Stock Purchase
Agreement, dated March 6, 2001, by and between the Corporation and Paul Revere,
(v) issuances as part of revolving credit facilities (including as payment of
interest or fees), (vi) any issuance in connection with acquisitions of other
entities or businesses by the Corporation, (vii) any issuance of securities by
the Corporation to business partners, in transactions approved by the Board of
Directors of the Corporation, the principal objective of which is other than
raising capital, and (viii) any issuance of Series A Preferred Stock at the
Class 2 Closing.

Section 11. Severability of Provisions. If any voting powers, preferences and
relative, participating, optional and other special rights of the Series


                                       25
<PAGE>   26

A Preferred Stock and qualifications, limitations and restrictions thereof set
forth in the Certificate is invalid, unlawful or incapable of being enforced by
reason of any rule of law or public policy, all other voting power, preferences
and relative, participating, optional and other special rights of the Series A
Preferred Stock and qualifications, limitations and restrictions thereof set
forth in this resolution (as so amended) which can be given effect without the
invalid, unlawful or unenforceable voting powers, preferences and relative,
participating, optional or other special rights of the Series A Preferred Stock
and qualifications, limitations and restrictions thereof shall, nevertheless,
remain in full force and effect and no voting powers, preferences and relative,
participating, optional or other special rights of the Series A Preferred Stock
and qualifications, limitations and restrictions thereof herein set forth shall
be deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of the Series A Preferred Stock
and qualifications, limitations and restrictions thereof unless so expressed
herein.

Section 12. General Provisions.

(a) The term "outstanding", when used with reference to share of stock, shall
mean issued shares, excluding shares held by the Corporation or a subsidiary.

(b) The headings of the sections, subsections, clauses and subclauses of this
Certificate are for convenience of reference only and shall not define, limit or
affect any of the provisions hereof.

(c) Reporting Status. For so long as 5% or more of the currently authorized
shares of Series A Preferred Stock remain outstanding, the Corporation shall
timely file all reports required to be filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Exchange Act, and the Corporation
shall not terminate its status as an issuer required to file reports under the
Exchange Act even if the Exchange Act or the rules and regulations thereunder
would permit such termination. The Corporation currently meets, and, so long as
5% or more of the currently authorized shares of Series A Preferred Stock remain
outstanding, will take reasonable action to continue to meet, the "registrant
eligibility" requirements set forth in the general instructions to Form S-3
under the Securities Act.

(d) Non-Contravention of Series A Junior Participating Preferred Stock.
Notwithstanding anything in this Certificate of Designations, Preferences and
Rights of Series A 8% Convertible Preferred Stock (including, without
limitation, the provisions of Section 8 hereof) to the contrary, nothing herein



                                       26
<PAGE>   27

shall limit, prohibit or impair the Corporation's right to issue shares of its
Series A Junior Participating Preferred Stock in accordance with the Rights
Agreement, dated as of February 22, 2000, between the Corporation and First
Union National Bank, as amended pursuant to Amendment No. 1 to the Rights
Agreement, dated September 28, 2000. Any such shares of Series A Junior
Participating Preferred Stock shall be Junior Securities.




                                       27
<PAGE>   28


                  IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this _________ day of March, 2001.





                                   By: _________________________________________
                                   Name: Douglas R. Lebda
                                   Title:  Chief Executive Officer and President




                                       28