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                                                                     EXHIBIT 4.9

                          MPOWER HOLDING CORPORATION

                      FORM OF CERTIFICATE OF DESIGNATION
                      OF THE VOTING POWERS, DESIGNATION,
                   PREFERENCES AND RELATIVE, PARTICIPATING,
             OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                     LIMITATIONS AND RESTRICTIONS OF THE
                  7.25% SERIES D CONVERTIBLE PREFERRED STOCK

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                        Pursuant to Section 151 of the

               General Corporation Law of the State of Delaware

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         Mpower Holding Corporation (the "Company"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, does hereby
certify that, pursuant to authority conferred upon the board of directors of the
Company (the "Board of Directors") by its Certificate of Incorporation, as
amended (the "Certificate"), and pursuant to the provisions of Section 151 of
the General Corporation Law of the State of Delaware, said Board of Directors,
by unanimous written consent or at a meeting duly called and held, adopted the
following resolution (the "Resolution") which remains in full force and effect:

         RESOLVED that pursuant to the authority vested in the Board of
Directors by its Certificate, the Board of Directors does hereby create,
authorize and provide for the issuance of 7.25% Series D Cumulative Convertible
Preferred Stock, par value $0.001 per share, with a liquidation preference of
$50.00 per share, consisting of 4,250,000 shares having the designations,
preferences, relative, participating, optional and other special rights and the
qualifications, limitations and restrictions thereof that are set forth in this
Resolution as follows:

         (a) Designation. There is hereby created out of the authorized and
unissued shares of Preferred Stock of the Company a series of Preferred Stock
designated as the 7.25% Series D Cumulative Convertible Preferred Stock (the
"Series D Preferred Stock"). The number of shares constituting the Series D
Preferred Stock shall be 4,250,000. The liquidation preference of the Series D
Preferred Stock shall be $50.00 per share (the "Liquidation Preference").
Capitalized terms used herein but not defined shall have the meanings assigned
to them in paragraph (1).

         (b) Rank. The Series D Preferred Stock will, with respect to dividend
rights and rights on liquidation, winding-up and dissolution, rank (i) senior to
all classes of Common Stock and to each other class of Capital Stock of the
Company or series of Preferred Stock of the Company established hereafter by the
Board of Directors of the Company, the terms of which do not expressly provide
that such class or series ranks senior to, or on a parity with, the Series D
Preferred Stock as to dividend rights and rights on liquidation, winding-up and
dissolution of the
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Company (collectively referred to, together with all classes of Common Stock of
the Company, as "Junior Stock"); (ii) on a parity with the Company's Series C
Preferred Stock and each class of Capital Stock of the Company or series of
Preferred Stock of the Company established hereafter by the Board of Directors
of the Company, the terms of which expressly provide that such class or series
will rank on a parity with the Series D Preferred Stock as to dividend rights
and rights on liquidation, winding-up and dissolution (collectively referred
to, together with the Company's Series C Preferred Stock, as "Parity Stock");
and (iii) junior to each class of Capital Stock of the Company or series of
Preferred Stock of the Company established hereafter by the Board of Directors
of the Company, the terms of which expressly provide that such class or series
will rank senior to the Series D Preferred Stock as to dividend rights or
rights on liquidation, winding-up and dissolution of the Company (collectively
referred to as "Senior Stock").

         (c) Dividends.

                  (i) Subject to the rights of any holders of Senior Stock or
Parity Stock, Holders of the outstanding shares of Series D Preferred Stock will
be entitled to receive, when, as and if declared by the Board of Directors of
the Company, out of funds legally available therefor, dividends on each share of
the Series D Preferred Stock at a rate per annum equal to 7.25% of the
Liquidation Preference of such share payable quarterly (each such quarterly
period being herein called a "Dividend Period"). All dividends on the Series D
Preferred Stock, to the extent accrued, shall be cumulative, whether or not
earned or declared, on a daily basis from the last date through which dividends
have been paid or, if no dividends have been paid, from the Issue Date, and
shall be payable quarterly in arrears on May 15, August 15, November 15 and
February 15 of each year (each a "Dividend Payment Date"), commencing on May 15,
2000 to Holders of record as they appear on the stock register of the Company at
the close of business on the Record Date (as defined hereinafter) immediately
preceding the relevant Dividend Payment Date. No interest or sums of money or
other property or securities in lieu of interest will be payable in respect of
any accumulated and unpaid dividends. "Record Date" means, with respect to a
Dividend Payment Date, the date established by the Board of Directors as the
record date therefor, which date shall, in any event, be a date that is not more
than 60 calendar days nor less than 15 calendar days before such Dividend
Payment Date.

         Any dividend on the Series D Preferred Stock shall be, at the option of
the Company, payable (A) in cash or (B) through the delivery of a number of
shares of the Company's Common Stock (dividends paid or payable in Common Stock
are hereinafter referred to as "Dividend Common Stock") equal to the total
dividend amount divided by the applicable Discounted Current Market Value (as
defined below) of the Common Stock. No fractional shares of Common Stock shall
be issued as a dividend on the Series D Preferred Stock. Instead, the Company
shall pay to the Transfer Agent for dissolution to the Holders as provided
herein cash in lieu of the fractional portion of one share which may result from
the computation of the number of shares of Dividend Common Stock as set forth in
the first sentence of this paragraph in an amount equal to the same traction of
the last sale price of a share of Common Stock on the Nasdaq National Market (or
the principal national securities exchange or other securities market on which
the Common Stock is then being traded) on the fourth Trading Day immediately


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preceding the Dividend Payment Date. The Transfer Agent is hereby authorized to
aggregate any fractional shares of Common Stock that would otherwise be
distributable as dividends, and to sell them at the best available price and
distribute the proceeds to the Holders thereof in proportion to their respective
interests. The Company shall reimburse the Transfer Agent for any expenses
incurred with respect to such sale, including brokerage commissions. If the
Company is precluded from paying cash for fractional shares, it shall pay cash
to the Holders for the fractional shares when it becomes legally and
contractually able to pay such cash.

         The "Discounted Current Market Value" of the Common Stock with respect
to a Dividend Payment Date means the product of (x) 95% and (y) the "Market
Average Value" relating to such Dividend Payment Date. The "Market Average
Value" shall equal the average of the daily closing prices of the Common Stock
for the five consecutive Trading Days ending on (and including) the fourth
Trading Day preceding such Dividend Payment Date. The closing price for each
Trading Day will be the last sales price on such date on the Nasdaq National
Market (or the principal securities exchange or other securities market on which
the Common Stock is then being traded). "Trading Day" means any day on which the
Common Stock is traded for any period on the Nasdaq National Market (or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded).

                  (ii) All dividends paid with respect to shares of the Series D
Preferred Stock pursuant to paragraph (c)(i) shall be paid pro rata to the
Holders entitled thereto.

                  (iii) Dividends shall accrue whether or not the Company has
earnings or profits, whether or not there are funds legally available for the
payment of such dividends and whether or not dividends are declared. Dividends
shall accumulate to the extent that such dividends are not paid on the Dividend
Payment Date to which they relate. No dividend whatsoever shall be declared or
paid upon, or any sum set apart for the payment of dividends upon, any
outstanding share of the Series D Preferred Stock with respect to any Dividend
Period unless all dividends for all preceding Dividend Periods have been
declared and paid or declared and a sufficient sum set apart for the payment of
such dividend, upon all outstanding shares of Series D Preferred Stock. No
dividend will be declared or paid on any Parity Stock unless full cumulative
dividends have been paid on the Series D Preferred Stock for all prior Dividend
Periods; provided, however, if accrued dividends on the Series D Preferred Stock
for all prior Dividend Periods have not been paid in full, then any, dividend
declared for any dividend period on any Parity Stock will be declared ratably in
proportion to accrued and unpaid dividends on the Series D Preferred Stock and
such Parity Stock and if dividends on any Parity Stock are due and payable and
have not been paid in full, then any dividend declared for any Dividend Period
on the Series D Preferred Stock will be declared ratably in proportion to
accrued and unpaid dividends on the Series D Preferred Stock and such Parity
Stock. The Company shall take all actions required or permitted under the
General Corporate Law of the State of Delaware to permit the payment of
dividends on the Series D Preferred Stock.

                  (iv) The Company will not (A) declare, pay or set apart funds
for the payment of any dividend or other distribution with respect to any Junior
Stock or (B) redeem, purchase or otherwise acquire for consideration any Junior
Stock through a sinking fund or otherwise, unless


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(1) all accrued and unpaid dividends with respect to the Series D Preferred
Stock at the time such dividends are payable have been paid or funds have been
set apart for payment of such dividends and (2) sufficient funds have been paid
or set apart for, or a sufficient number of shares of Common Stock have been
reserved for, the payment of the dividend for the current Dividend Period with
respect to the Series D Preferred Stock. Notwithstanding anything in this
Certificate of Designation to the contrary, the Company may declare and pay
dividends on Parity Stock which are payable solely in additional shares of or by
the increase in the liquidation value of Parity Stock or Junior Stock or on
Junior Stock which are payable in additional shares of or by the increase in the
liquidation value of Junior Stock, as applicable, or repurchase, redeem or
otherwise acquire Junior Stock in exchange for Junior Stock and Parity Stock in
exchange for Parity Stock or Junior Stock.

                  (v) Dividends for any past Dividend Period may be declared and
paid at any time, without reference to any regular Dividend Payment Date, to
Holders of record on a date established by the Board of Directors as the record
date therefor, which date shall be no more than 15 Business Days and no less
than one Business Day prior to the date of payment thereof, as such date may be
fixed by the Board of Directors of the Company.

                  (vi) Dividends payable on the Series D Preferred Stock for any
period other than a full Dividend Period shall be computed on the basis of a
360-day year consisting of twelve 30-day months. If a Dividend Payment Date is
not a Business Day, payment of dividends shall he made on the next succeeding
Business Day and dividends accruing for the intervening period shall be paid on
the next succeeding Dividend Payment Date.

         (d) Liquidation Preference.

                  (i) Upon any voluntary or involuntary liquidation. dissolution
or winding-up of the Company, and subject to the rights of holders of Senior
Stock and Parity Stock, each Holder of Series D Preferred Stock shall be
entitled to be paid, out of the assets of the Company available for distribution
to its stockholders, an amount equal to the Liquidation Preference for each
share of Series D Preferred Stock held by such Holder, plus, without
duplication, an amount in cash equal to all accumulated and unpaid dividends
(whether declared or undeclared) thereon to the date fixed for liquidation,
dissolution or winding-up, before any distribution is made on any Junior Stock.
If, upon any voluntary or involuntary liquidation, dissolution or winding-up of
the Company, there are not sufficient assets to pay the amounts payable with
respect to the Series D Preferred Stock and all Parity Stock in full, all
accumulated and unpaid dividends on the Series D Preferred Stock and all Parity
Stock will be paid in full and then the Holders of Series D Preferred Stock and
the holders of Parity Stock will share ratably (in proportion to the other
amounts that would be payable on such shares of Series D Preferred Stock and the
Parity Stock, respectively, if all amounts payable thereon had been paid in
full) in any distribution of assets of the Company to which each is entitled.
If, upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, there are not sufficient assets to pay all accumulated and unpaid
dividends in full, then the Holders of the Series D Preferred Stock and the
holders of Parity Stock will share ratably (in proportion to the respective
accumulated and unpaid dividends) in any distribution of assets of the Company
to which each is entitled. After payment




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of the full amount of the Liquidation Preference of the outstanding shares of
Series D Preferred Stock (plus any accumulated and unpaid dividends), the
Holders of shares of Series D Preferred Stock will not be entitled to any
further participation in any distribution of assets of the Company.

                  (ii) For the purposes of this paragraph (d), neither the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation or merger of the Company with or into one or more
other entities shall be deemed to be a liquidation, dissolution or winding-up of
the Company.

         (e) Redemption.

                  (i) (A) Mandatory Redemption. On February 15, 2012 (the
"Mandatory Redemption Date"), the Company shall be required to redeem, subject
to the legal availability of funds therefor, all outstanding shares of Series D
Preferred Stock at a price in cash equal to the Liquidation Preference thereof,
plus accumulated and unpaid dividends, if any, whether declared or undeclared,
to the Mandatory Redemption Date (the "Mandatory Redemption Price"). The Company
shall not be required to make sinking fund payments with respect to the Series D
Preferred Stock. The Company shall take all actions required or permitted under
the laws of the State of Delaware to permit such redemption.

                  (B) The Provisional Redemption. The Series D Preferred Stock
may be redeemed, in whole or in part, at the option of the Company at a
redemption price of 105.8% of the Liquidation preference, plus accumulated and
unpaid dividends, if any, whether declared or undeclared, to the date fixed for
such redemption (the "Provisional Redemption Date") (the foregoing amounts,
together with the Additional Payment, as hereinafter defined, being the
"Provisional Redemption Price"), on or after February 15, 2002, but prior to
February 15, 2003, if the closing price of the Common Stock equals or exceeds
150% of the Conversion Price for at least 20 Trading Days within any 30 Trading
Day period (such redemption, a "Provisional Redemption"). In the event that the
Company Undertakes a Provisional Redemption, the Holders of shares of Series D
Preferred Stock that are called for Provisional Redemption will also receive a
payment (the "Additional Payment") in an amount equal to the present value
(calculated using the bond equivalent yield on U.S. Treasury notes or bills
having a term nearest in length to that of the Additional Period (as hereinafter
defined) as of the day immediately preceding the date on which a notice of
Provisional Redemption is mailed to the Holders) of the aggregate amount of the
dividends that would thereafter have been payable on the Series D Preferred
Stock (whether or not such dividends have been declared) for the period from the
Provisional Redemption Date to February 15, 2003 (such period being referred to
as the "Additional Period").

         The Provisional Redemption Price shall be, at the option of the
Company, payable (v) in cash, (w) through the delivery of a number of shares of
Common Stock equal to the Provisional Redemption Price divided by the
Provisional Redemption Value (as defined below) of the Common Stock or (x) any
combination of (v) and (w). The "Provisional Redemption Value" of



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the Common Stock with respect to a Provisional Redemption Date means the product
of (y) 95% and (z) the average of the daily closing prices of the Common Stock
for the five consecutive Trading Days ending on (and including) the fourth
Trading Day preceding such Provisional Redemption Date. The closing price for
each Trading Day will be the last sales price on such date on the Nasdaq
National Market (or the principal securities exchange or other securities market
on which the Common Stock is then being traded). No fractional shares of Common
Stock shall be issued in connection with the payment of the Provisional
Redemption Price. Instead, the Company shall pay to the Transfer Agent for
distribution to the Holders as provided herein cash in lieu of the fractional
portion of one share which may result from the computation of the number of
shares of Common Stock to be paid as set forth in the first two sentences of
this paragraph in an amount equal to the same fraction of the last sales price
of a share of Common Stock on the Nasdaq National Market (or the principal
national securities exchange or other securities market on which the Common
Stock is then being traded) on the fourth Trading Day immediately preceding the
Provisional Redemption Date. The Transfer Agent is hereby authorized to
aggregate any fractional shares of Common Stock that would otherwise be
distributed in connection with the payment of the Provisional Redemption Price,
and to sell them at the best available price and distribute the proceeds to the
Holders thereof in proportion to their respective interests. The Company shall
reimburse the Transfer Agent for any expenses incurred with respect to such
sale, including brokerage commissions. If the Company is precluded from paying
cash for fractional shares, it shall pay cash to the Holders for the fractional
shares, it shall pay when it becomes legally and contractually able to pay such
cash.

         The Company may elect to pay the Provisional Redemption Price by
delivering shares of Common Stock only if:

                  (i) The shares of Common Stock of the Company to be issued as
payment of the Provisional Redemption Price (x) shall not require registration
under any federal securities law before such shares may be freely transferable
without being subject to any transfer restrictions under the Securities Act or,
if such registration is required, such registration shall be completed and shall
become effective prior to the Provisional Redemption Date, and (y) shall not
require registration with or approval of any governmental authority under any
state laws or any other federal law before such shares may be validly issued or
delivered or if such registration is required or such approval must be obtained,
such registration shall be completed or such approval shall be obtained prior to
the Provisional Redemption Date;

                  (ii) The shares of Common Stock of the Company to be issued
are, or shall have been, approved for listing on the Nasdaq National Market or
the New York Stock Exchange or listed on another national securities exchange,
in any case, prior to the Provisional Redemption Date; and

                  (iii) All shares of Common Stock of the Company which may be
issued as payment of the Provisional Redemption Price will be issued out of the
Company's authorized but unissued Common Stock and, will upon issue, be duly and
validly issued and fully paid and non-assessable and free of any preemptive or
similar rights.



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                           (C) In the case of any partial Provisional
Redemption, selection of the Series D Preferred Stock for redemption will be
made by the Company in compliance with the requirements of the principal
national securities exchange, if any, on which the Series D Preferred Stock is
listed, or if the Series D Preferred Stock is not listed on a national
securities exchange, on a pro rata basis, by lot or such other method as the
Company, in its sole discretion, shall deem fair and appropriate; provided,
however, that the Company may redeem all the shares held by Holders of fewer
than 100 shares (or all of the shares held by the Holders who would hold less
than 100 shares as a result of such redemption) as may be determined by the
Company.

                           (D) In the case of a Mandatory Redemption Date or
Provisional Redemption Date falling after a Record Date and prior to the related
Dividend Payment Date, the Holders of the Series D Preferred Stock at the close
of business on such Record Date will be entitled to receive the dividend payable
on such shares on the corresponding Dividend Payment Date, notwithstanding the
redemption of such shares following such Record Date. Except as provided for in
the preceding sentence, no payment or allowance will be made for accrued
dividends on any shares of Series D Preferred Stock called for redemption.

                  (ii) Procedure for Redemption. (A) On and after the Mandatory
Redemption Date or Provisional Redemption Date, as the case may be, unless the
Company defaults in the payment of the applicable redemption price, dividends
will cease to accumulate on shares of Series D Preferred Stock called for
redemption and all rights of Holders of such shares will terminate except for
the right to receive the Mandatory Redemption Price or Provisional Redemption
Price, as the case may be, without interest.

                           (B) With respect to a redemption pursuant to
paragraph (e)(1)(A) or (B), the Company will send a written notice of redemption
by first class mail to each Holder of record of shares of Series D Preferred
Stock, not fewer than 30 days nor more than 60 days prior to the Mandatory
Redemption Date or Provisional Redemption Date, as applicable, at its registered
address (the "Redemption Notice"); provided, however, that neither the failure
to give such notice nor any deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Series D Preferred Stock to be
redeemed except as to the Holder or Holders to whom the Company has failed to
give said notice or except as to the Holder or Holders whose notice was
defective. The Redemption Notice shall state:

                           (1) that the redemption is pursuant to paragraph
(e)(i)(A) or (B) hereof, as applicable;

                           (2) the Mandatory Redemption Price or Provisional
Redemption Price, as applicable and, in the case of a Provisional Redemption,
whether the Provisional Redemption Price will be paid in cash, through the
delivery of shares of Common Stock, or a combination thereof (and, if a
combination thereof, stating the percentages of the total Provisional Redemption
Price that will be paid in cash and in shares of Common Stock);

                           (3) in the case of a Provisional Redemption as to
which all or a portion of the Provisional Redemption Price is to be paid through
the delivery of shares of Common



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Stock, that the determination of the number of shares of Common Stock to be
delivered shall be calculated as set forth in paragraph (e)(i)(B);

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

                           (5) the Mandatory Redemption Date or Provisional
Redemption Date, as applicable;

                           (6) that the Holder is to surrender to the Company,
in the manner, at the place or places designated, his certificate or
certificates representing the shares of Series D Preferred Stock to be redeemed;
and

                           (7) that dividends on the shares of the Series D
Preferred Stock to be redeemed shall cease to accumulate on such Mandatory
Redemption Date or Provisional Redemption Date, as the case may be, unless the
Company defaults in the payment of the Mandatory Redemption Price or Provisional
Redemption Price, as the case may be.

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

                           (D) The Company shall comply with any securities laws
and regulations, to the extent such laws and regulations are applicable, in
connection with any mandatory or provisional redemption.

         (f) Voting Rights.

                           (A) The Holders of Series D Preferred Stock shall not
be entitled to vote on any matter required or permitted to be voted upon by the
stockholders of the Company, except as otherwise required under Delaware law or
as hereinafter provided.

                           (B) (1) If (x) dividends on the Series D Preferred
Stock are in arrears and unpaid for six or more Dividend Periods (whether or not
consecutive), (y) the Company has not redeemed in cash all of the outstanding
shares of Series D Preferred Stock on the Mandatory Redemption Date, or (z)
after the occurrence of a Non-Stock Change of Control, the Company fails to
offer to repurchase or convert the Series D Preferred Stock in accordance with
the terms of paragraph (g)(H)(2) or fails to repurchase or convert any shares of
Series D Preferred Stock


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accepting such offer on the Repurchase Date (each a "Voting Rights Triggering
Event"), then the Holders of the then outstanding shares of Series D Preferred
Stock (together with the holders of Parity Stock upon which like rights have
been conferred and are exercisable), voting separately and as a class, shall
have the right and power to elect to serve on the Board of Directors the lesser
of (x) two additional members to the Board of Directors or (y) that number of
directors constituting at least 25% of the members of the Board of Directors,
and the number of members of the Board of Directors shall, subject to paragraph
(f)(B)(5), be immediately and automatically increased by such number.

                           (2) The voting rights set forth in paragraph
(f)(B)(1) above will continue until such time as all dividends in arrears on the
Series D Preferred Stock are paid in full or all Voting Right, Triggering Events
are cured or waived, at which time the term of any directors elected pursuant to
the provisions of paragraph (f)(B)(1) above (subject to the right of holders of
any other Preferred Stock to elect directors pursuant to the terms of the
instruments governing such Preferred Stock) shall terminate forthwith and the
number of directors constituting the Board of Directors shall be decreased by
such number (until the occurrence of any subsequent Voting Rights Triggering
Event).

                  At any time alter voting power to elect directors shall have
become vested and be continuing in the Holders of Series D Preferred Stock
(together with the holders of Parity Stock upon which like rights have been
conferred and are exercisable) pursuant to paragraph (f)(B)(1) hereof, or if
vacancies shall exist in the offices of directors elected by such holders, a
proper officer of the Company may, and upon the written request of the Holders
of record of at least 25% of the shares of Series D Preferred Stock then
outstanding or the holders of 25% of the shares of Parity Stock then outstanding
upon which like rights have been conferred and are exercisable addressed to the
secretary of the Company shall, call a special meeting of the Holders of Series
D Preferred Stock and the holders of such Parity Stock for the purpose of
electing the directors which such holders are entitled to elect pursuant to the
terms hereof; provided, however, that no such special meeting shall be called if
the next annual meeting of stockholders of the Company is to be held less than
60 days and more than 30 days after the voting power to elect directors shall
have become vested, in which case such meeting shall be deemed to have been
called for such next annual meeting. If such meeting shall not be called by a
proper officer of the Company within 20 days after personal service to the
secretary of the Company at its principal executive offices, then the Holders of
record of at least 25% of the outstanding shares of Series D Preferred Stock or
the holders of 25% of the shares of Parity Stock upon which like rights have
been conferred and are exercisable may designate in writing one of their members
to call such meeting at the expense of the Company, and such meeting may be
called by the person so designated upon the notice required for the annual
meetings of stockholders of the Company and shall be held at the place for
holding the annual meetings of stockholders. Any holder of Series D Preferred
Stock or such Parity Stock so designated shall have, and the Company shall
provide, access to the lists of Holders of Series D Preferred Stock and the
holders of such Parity Stock to be called pursuant to the provisions hereof. If
no special meeting of the Holders of Series D Preferred Stock and the holders of
such Parity Stock is called as provided in this paragraph (f)(B), then such
meeting shall be deemed to have been called for the next annual




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meeting of stockholders of the Company or special meeting of the holders of any
other Capital Stock of the Company.

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

                           (4) Any vacancy occurring in the office of a director
elected by the Holders of Series D Preferred Stock (and such Parity Stock) may
be filled by the remaining director elected by the Holders of Series D Preferred
Stock (and such Parity Stock) unless and until such vacancy shall be filled by
the Holders of Series D Preferred Stock (and such Parity Stock).

                           (5) If an event occurs at any time that results in
the holders of any Parity Stock (other than the holders of the Series C
Preferred Stock) having voting rights to elect directors to the Board of
Directors, then Holders of Series D Preferred Stock shall, whether or not such
event otherwise constitutes a Voting Rights Triggering Event pursuant to
paragraph (t)(B)(1), have the voting rights set forth in paragraphs (f)(B)(1)
and (f)(B)(2), and such event shall be deemed (for purposes of this paragraph
(f) only) to constitute a Voting Rights Triggering Event. In addition, in the
event that during a time in which directors elected by the Holders of Series D
Preferred Stock pursuant to this paragraph (f)(B) are serving on the Board of
Directors ("Previously-Elected Directors") an event occurs that results in
holders of Parity Stock (other than the holders of the Series C Preferred
Stock) having voting rights to elect (voting together with the Holders of
Series D Preferred Stock) at least two directors to the Board of Directors, the
Holders of Series D Preferred Stock shall vote together with the holders of
such Parity Stock to elect such new directors, and upon the election of the new
directors the Previously-Elected Directors shall (unless such
Previously-Elected Directors are elected as new directors) cease to serve on
the Board of Directors.

                           (C) (1) So long as any shares of the Series D
Preferred Stock are outstanding, the Company will not (i) authorize, create (by
way of reclassification or otherwise), increase the authorized amount of or
issue any class or series of Senior Stock or any obligation or security
convertible into, exchangeable for or evidencing the right to purchase shares of
any class or series of Senior Stock, or (ii) amend the provisions of paragraph
(g)(H) hereof, without the affirmative vote or consent of Holders of at least
two-thirds of the shares of Series D Preferred Stock then outstanding, voting or
consenting, as the case may be, as one class, given in person or by proxy,
either in writing or by resolution adopted at an annual or special meeting.
However, without the consent of any Holder of Series D Preferred Stock, the
Company may increase the authorized number of shares of, issue additional shares
of or create additional classes of Common Stock, increase the authorized number
of shares of Preferred Stock or issue a series of Parity Stock or Junior Stock.



                                       10
<PAGE>   11
                           (2) So long as any shares of the Series D Preferred
Stock are outstanding, the Company will not (i) amend this Certificate of
Designation, either directly or indirectly, or through merger or consolidation
with another entity, so as to affect adversely the specified rights,
preferences, privileges or voting rights of Holders of shares of Series D
Preferred Stock or to increase or decrease the aggregate number of authorized
shares of Series D Preferred Stock or (ii) waive any Voting Right Triggering
Event or compliance with any provision hereof without the affirmative vote or
consent of Holders of at least a majority of the issued and outstanding shares
of Series D Preferred Stock, voting or consenting, as the case may be, as one
class, given in person or by proxy, either in writing or by resolution adopted
at an annual or special meeting.

                           (3) So long as any shares of the Series D Preferred
Stock are outstanding, without the consent of each Holder affected, an amendment
or waiver of the Certificate or of this Certificate of Designation may not (with
respect to any shares of Series D Preferred Stock held by a non-consenting
Holder) (i) alter the voting rights with respect to the Series D Preferred Stock
(other than the waiver of a Voting Rights Triggering Event as provided in
paragraph (f)(C)(2)) or reduce the number of shares of Series D Preferred Stock
whose holders must consent to an amendment, supplement or waiver; (ii) reduce
the Liquidation Preference of or alter the provisions with respect to the
redemption of the Series D Preferred Stock; (iii) reduce the rate of or change
the time for payment of dividends on any share of Series D Preferred Stock; (iv)
make any share of Series D Preferred Stock payable in any form other than that
stated in this Certificate of Designation; (v) after the occurrence of a Change
of Control, amend the provisions of paragraph (g)(H) hereof; or (vi) make any
change in the amendment and waiver provisions of this paragraph (f)(C)(3).

                           (4) Notwithstanding the foregoing, the Company when
authorized by resolutions of its Board of Directors may amend or supplement this
Certificate of Designation without the consent of any Holder to (i) cure any
ambiguity, defect or inconsistency or (ii) make any other change provided that
such amendments or supplements shall not adversely affect the interests of the
Holders.

                           (5) Except as set forth in paragraph (f)(C)(1) or (2)
above, (x) the creation, authorization or issuance of any shares of any Junior
Stock or Parity Stock, including the designation of a series of Preferred Stock,
or (y) the increase or decrease in the amount of authorized Capital Stock of any
class, including Preferred Stock, shall not require the consent of Holders of
Series D Preferred Stock and shall not be deemed to affect adversely the
interests, rights, preferences, privileges or voting rights of shares of Series
D Preferred Stock.

                           (D) In any case in which the Holders of Series D
Preferred Stock shall be entitled to vote pursuant to this paragraph (f) or
pursuant to Delaware law, each Holder of Series D Preferred Stock entitled to
vote with respect to such matters shall be entitled to one vote for each share
of Series D Preferred Stock held; provided that any shares of Series D Preferred
Stock that are held by the Company or by any Person controlled by the Company
shall not entitle the Holders thereof to any votes with respect thereto. For
purposes of this provision, "controlled by," as used with respect to any Person,
shall mean the possession, directly or indirectly, of the



                                       11
<PAGE>   12
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting equity securities, by agreement
or otherwise.

         (g) Conversion.

                           (A) (1) Except as set forth in paragraph (g)(A)(2)
below, at any time after the Issue Date, at the option of the Holder thereof,
any share of Series D Preferred Stock may be converted into such number of fully
paid and nonassessable shares of Common Stock (calculated as to each conversion
to the nearest 1/10 of a share), as equals the Liquidation Preference divided by
the Conversion Price, determined as hereinafter provided, in effect at the time
of conversion. In case a share of Series D Preferred Stock is called for
redemption, such conversion right in respect of the share of Series D Preferred
Stock so called shall expire at the close of business on the Mandatory
Redemption Date or Provisional Redemption Date, as applicable, unless the
Company defaults in making the payment due upon redemption.

                           (2) On or after February 15, 2003, if the closing
price of the Common Stock equals or exceeds 140% of the then current Conversion
Price, as hereinafter provided, for at least 20 Trading Days within any 30
consecutive Trading Day period, then the Company shall have the right, at its
option, to cancel the conversion rights of the Holders of the Series D Preferred
Stock described in the paragraph above (the "Conversion Rights"). The closing
price for each Trading Day will be the last sales price on such date on the
Nasdaq National Market (or the principal national securities market or exchange
on which the Common Stock is then being traded). The Company may exercise such
right by issuing a press release for publication on the Dow Jones News Service
(or a comparable news service) prior to the opening of business on the second
Trading Day after any period in which the condition in the preceding sentence
has been met. The press release shall announce that (i) the Company is canceling
the Conversion Rights of the Series D Preferred Stock and (ii) the date such
Conversion Rights will expire (the "Expiration Date"). The press release shall
also provide the Conversion Price and the closing price of the Common Stock,
each as of the close of business of the previous Trading Day. The Company must
notify the Holders of the Series D Convertible Preferred Stock of the expiration
of the Conversion Rights by first-class mail not more than four business days
after the issuance of the press release, provided, however, that neither the
failure to give such notice nor any deficiency therein shall affect the validity
of the procedure for the elimination of conversion rights except with respect to
the Holder or Holders to whom the Company failed to give such notice or whose
notice was defective. The Company will select the date upon which the Conversion
Rights will expire, which date will be not less than 30 nor more that 60 days
after the date of the issuance of the press release. The Conversion Rights of
the Holders of the Series D Convertible Preferred Stock will terminate at the
close of business of the Expiration Date.

                           (3) The price at which Common Stock shall be
delivered upon conversion (herein called the "Conversion Price") shall be
initially $65.34 per share of Common Stock. The Conversion Price shall be
adjusted in certain instances as provided in paragraph (g)(D) or paragraph
(g)(H).


                                       12
<PAGE>   13
                           (B) In order to exercise the conversion privilege
provided for in paragraph (g)(A)(l), the Holder of any share of Series D
Preferred Stock to be converted shall Surrender the certificate for such share
of Series D Preferred Stock, duly endorsed or assigned to the Company or in
blank, at the office of the Transfer Agent or at any office or agency of the
Company maintained for that purpose, accompanied by written notice to the
Company in the form of Exhibit B that the Holder elects to convert such share of
Series D Preferred Stock or, if fewer than all the shares of Series D Preferred
Stock represented by a single share certificate are to be converted, the number
of shares represented thereby to be converted. Such notice shall also contain
the office or the address to which the Company should deliver shares of Common
Stock issuable upon conversion (and any other payments or certificates related
thereto).

                  Holders of shares of Series D Preferred Stock at the close of
business on a Record Date will be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date notwithstanding the
conversion of such shares following such Record Date and prior to such Dividend
Payment Date. However, shares of Series D Preferred Stock surrendered for
conversion during the period between the close of business on any Record Date
and the opening of business on the corresponding Dividend Payment Date (except
shares converted after the issuance of a notice of redemption with respect to a
redemption date during such period, which will be entitled to such dividend)
must be accompanied by payment of an amount equal to the dividend payable on
such shares on such Dividend Payment Date. A Holder of shares of Series D
Preferred Stock on a Record Date who (or whose transferee) tenders any such
shares for conversion into shares of Common Stock on such Dividend Payment Date
will receive the dividend payable by the Company on such shares of Series D
Preferred Stock on such date, and the converting Holder need not include payment
of the amount of such dividend upon surrender of shares of Series D Preferred
Stock for conversion. Except as provided above, the Company will make no payment
or allowance for unpaid dividends, whether or not in arrears, on converted
shares.

                   Shares of Series D Preferred Stock shall be deemed to have
been converted immediately prior to the close of business on the date such
shares of Series D Preferred Stock are surrendered for conversion in accordance
with the foregoing provisions, and at such time the rights of the Holders of
such shares of Series D Preferred Stock as Holders shall cease, and the person
or persons entitled to receive the Common Stock issuable upon conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
at such time. As promptly as practicable on or after the conversion date, the
Company shall issue and shall deliver to such office or agency as the converting
Holder shall have designated in its written notice to the Company a certificate
or certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in paragraph (g)(C) hereof.

                  In the case of any conversion of fewer than all the shares of
Series D Preferred Stock evidenced by a certificate, upon such conversion the
Company shall execute and the Transfer Agent shall authenticate and deliver to
the Holder thereof (at the address designated by such Holder), at the expense of
the Company, a new certificate or certificates representing the number of
unconverted shares of Series D Preferred Stock.



                                       13
<PAGE>   14
                           (C) No fractional shares of Common Stock shall be
issued upon the conversion of a share of Series D Preferred Stock. If more than
one share of Series D Preferred Stock shall be surrendered for conversion at one
time by the same Holder, the number of full shares of Common Stock which shall
be issuable upon conversion thereof shall be computed on the basis of the
aggregate shares of Series D Preferred Stock so surrendered. Instead of any
fractional share of Common Stock which would otherwise be issuable upon
conversion of any share of Series D Preferred Stock, the Company shall pay a
cash adjustment in respect of such fraction in an amount equal to the same
fraction of the last sales price of a share of Common Stock on the Nasdaq
National Market (or the principal national securities exchange or other
securities market on which the Common Stock is then being traded) on the last
Trading Day immediately preceding the day of conversion.

                           (D) The Conversion Price shall be adjusted from time
to time by the Company as follows, each a "Conversion Price Adjustment Event"
(the variables have the definitions set forth in paragraph (g)(D)(7) below):

                           (1) If the Company shall make any redemption payment
or payment of a dividend or other distribution payable in shares of Common Stock
to all holders of any class of Capital Stock of the Company, other than the
issuance of shares of Common Stock in connection with the payment (1) in
redemption for, of dividends on, or upon the conversion of, the Series D
Preferred Stock, (2) in redemption for, of dividends on, or upon the conversion
of the Series C Preferred Stock or any Parity Stock in accordance with the
Certificates of Designation governing such securities, or (3) to all Holders of
the Series D Preferred Stock based upon the number of shares of Common Stock
into which the Series D Preferred Stock is then convertible, then the
Conversion Price in effect immediately prior to such event shall be adjusted
pursuant to the formula: X/Y multiplied by CP=ACP.

                           (2) If the Company shall issue to all holders of
shares of Common Stock rights, options or warrants entitling them to subscribe
for or purchase shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock at an exercise price that is less than
the closing price of a share of Common Stock on the Nasdaq National Market (or
the principal national securities exchange or other securities market on which
the Common Stock is then being traded) on the last Trading Day immediately
preceding the date of issuance of such rights, options or warrants, then the
Conversion Price in effect immediately prior to such event shall be adjusted
pursuant to the formula: X/X+(U((ClosePrice-EP)/ ClosePrice)) multiplied by
CP=ACP; provided, however, that no adjustment will be made with respect to such
a distribution if the Holder of shares of the Series D Preferred Stock would be
entitled to receive such rights, options or warrants at any time on or before
the conversion at any time of shares of the Series D Preferred Stock into Common
Stock and provided, further, that if such rights, options or warrants are only
exercisable upon the occurrence of certain triggering events, then the
Conversion Price will not be adjusted until such triggering events occur. If any
options, warrants or other rights of the nature described in this paragraph
(g)(D)(2) ("Rights") expire without exercise or conversion, the Conversion Price
will be readjusted to the Conversion Price which would otherwise be in effect
had the adjustment made upon the issuance of such




                                       14
<PAGE>   15
Rights been made on the basis of delivery of only the number of shares of Common
Stock actually delivered upon the exercise or conversion of such Rights.

                           (3) In the case of any subdivision, combination or
reclassification of the Common Stock, then the Conversion Price in effect
immediately prior to such event shall be adjusted pursuant to the formula: X/Y
multiplied by CP=ACP.

                           (4) If the Company shall make any distribution
consisting exclusively of cash (excluding any cash distributed in a transaction
for which paragraph (g)(D)(12) below is applicable) to all holders of shares of
Common Stock (which distribution is not also being made to the Holders of Series
D Preferred Stock based on the number of shares of Common Stock into which the
Series D Preferred Stock is then convertible) in an aggregate amount that,
combined together with (1) all other such cash distributions made within the
then-preceding 12 months in respect of which no adjustment has been made and (2)
any cash and the fair market value (as determined by the Board of Directors in
good faith pursuant to a resolution) of other consideration paid or payable in
respect of any tender offer by the Company or any of its subsidiaries for shares
of Common Stock concluded within the then-preceding 12 months in respect of
which no adjustment has been made, exceeds 15% of the Company's Pre-Distribution
Market Capitalization (as defined in paragraph (g)(D)(7) below), then the
Conversion Price in effect immediately prior to such event shall be adjusted
pursuant to the formula: CP-(CP multiplied by ((Cash-15% PDMC)/PDMC))=ACP. There
will be no adjustment to the Conversion Price if (Cash-15% PDMC) is less than or
equal to zero.

                           (5) In the case of the completion of a tender or
exchange offer made by the Company or any of its subsidiaries for shares of
Common Stock (i) that involves an aggregate consideration that, together with
(1) any cash and other consideration payable in a tender or exchange offer by
the Company or any of its subsidiaries for shares of Common Stock expiring
within the then-preceding 12 months in respect of which no adjustment has been
made and (2) the aggregate amount of any such cash distributions referred to in
paragraph (g)(D)(4) above to all holders of shares of Common Stock within the
then-preceding 12 months in respect of which no adjustments have been made,
exceeds 15% of the Company's Post-Tender Market Capitalization (as defined in
paragraph (g)(D)(7) below) and (ii) where the tender offer price or exchange
offer price pr share of Common Stock is greater than the closing price of the
Common Stock on the Trading Day immediately succeeding the Expiration Time, then
the Conversion Price in effect immediately prior to such event shall be adjusted
pursuant to the formula: CP multiplied by ((EX multiplied by TotSh)/(TPur +
(NetSh multiplied by EX)))=ACP. There will be no adjustment to the Conversion
Price if the tender offer price or exchange offer price per share of Common
Stock is less than or equal to EX or if TOff is not greater than 15% of PTMC.

                           (6) If the Company shall make a distribution to all
holders of Common Stock (which distribution is not also being made to the
Holders of the Series D Preferred Stock based on the number of shares of Common
Stock into which the Series D Preferred Stock is then convertible) consisting of
(i) evidences of indebtedness, (ii) shares of Capital Stock of the Company other
than Common Stuck, or (iii) assets other than cash, including securities, but
excluding those dividends and those issuances of rights, options, warrants and
other distributions




                                       15
<PAGE>   16
for which an adjustment to the Conversion Price as referred to above is
applicable (other than in connection with a merger effected solely to reflect a
change in the jurisdiction of incorporation of the Company), then the Conversion
Price in effect immediately prior to such event shall be adjusted pursuant to
the formula: CP-(Value/#Sh)=ACP.

                           (7) Variables. In the preceding descriptions, the
variables have the following definitions:

                  "U" equals the number of shares of Common Stock underlying all
rights, options or warrants issued to holders of Common Stock pursuant to
paragraph (g)(D)(2) above entitling such holders to subscribe for or purchase
shares of Common Stock or securities convertible into or exchangeable for shares
of Common Stock issued in the Conversion Price Adjustment Event;

                  "X" equals the total number of shares of Common Stock
outstanding immediately prior to the Conversion Price Adjustment Event
(excluding unexercised options, warrants or rights);

                  "Y" equals the total number of shares of Common Stock
outstanding immediately after the Conversion Price Adjustment Event (excluding
unexercised options, warrants or rights);

                  "Cash" equals the sum of (a) any distribution consisting
exclusively of cash (excluding any cash distributed upon a merger or
consolidation to which paragraph (g)(D)(12) below applies) to all holders of
shares of Common Stock (which distribution is not also being made to the Holders
of Series D Preferred Stock based upon the number of shares of Common Stock into
which the Series D Preferred Stock is then convertible) and (b) all other such
all-cash distributions made within the then-preceding 12 months in respect of
which no adjustment has been made and (c) any cash and the fair market value of
other consideration (as determined by the Board of Directors in good faith and
pursuant to a resolution) paid or payable in respect of any tender offer by the
Company or any of its subsidiaries for shares of any class of Common Stock
concluded within the then-preceding 12 months in respect of which no adjustment
has been made pursuant to paragraph (g)(D)(4) or (5);

                  "ClosePrice" means with respect to any date, the last sales
price of a share of Common Stock on the Nasdaq National Market (or the principal
national securities exchange or other securities market on which the Common
Stock is then being traded) on the last Trading Day immediately preceding such
date;

                  "EP" equals the exercise price or other consideration to be
paid by the holder upon the conversion or exchange of "U";

                  "EX" equals the closing price of the Common Stock on the
Trading Day immediately succeeding the Expiration Time;

                  "Expiration Time" means, with respect to a tender or exchange
offer giving rise to a Conversion Price Adjustment Event pursuant to paragraph
(g)(D)(5), the last time that tenders




                                       16
<PAGE>   17
of shares of Common Stock could have been made pursuant to the terms of such
tender or exchange offer (as the same may be amended);

                  "NetSh" means a number of shares of Common Stock equal to (a)
TotSh minus (b) Purchased Shares;

                  "PDMC" or "Pre-Distribution Market Capitalization" means, with
respect to a Conversion Price Adjustment Event pursuant to paragraph (g)(D)(4),
an amount equal to the product of (a) the ClosePrice of the Common Stock as of
the record date with respect to the distribution constituting such Conversion
Price Adjustment Event multiplied by (b) the number of shares of Common Stock
outstanding at the close of business on the record date for such distribution;

                  "PTMC" or "Post-Tender Market Capitalization" means, with
respect to a Conversion Price Adjustment Event pursuant to paragraph (g)(D)(5),
an amount equal to the product of (a) EX multiplied by (b) TotSh;

                  "Purchased Shares" means, in connection with a tender or
exchange offer giving rise to a Conversion Price Adjustment Event pursuant to
paragraph (g)(D)(5), the number of shares of Common Stock accepted (up to any
maximum number of such shares specified in the terms of such tender or exchange
offer) and validly tendered and not withdrawn as of the Expiration Time;

                  "#Sh" equals the number of shares of Common Stock receiving
the distribution contemplated in paragraph (g)(D)(6);

                  "TOff" equals the sum of (a) the aggregate consideration paid
by the Company or any of its subsidiaries for shares of Common Stock in a tender
or exchange offer made by the Company or any of its subsidiaries for shares of
Common Stock and (b) any cash or other consideration payable in a tender or
exchange offer by the Company or any of its subsidiaries for shares of Common
Stock expiring within the then-preceding 12 months in respect of which no
adjustment has been made and (c) the aggregate amount of any such all-cash
distributions referred to in paragraph (g)(D)(4) to all holders of shares of
Common Stock within the then-preceding 12 months in respect of which no
adjustments have been made;

                  "TotSh" equals the total number of shares of Common Stock
outstanding (including any shares tendered in the tender or exchange offer) at
the Expiration Time;

                  "TPur" equals the product of (a) the fair market value (as
determined by the Board of Directors in good faith pursuant to a resolution) of
the consideration payable for one share of Common Stock under the terms of the
tender or exchange offer giving rise to a Conversion Price Adjustment Event
pursuant to paragraph (g)(D)(5) multiplied by (b) the number of Purchased
Shares;


                                       17
<PAGE>   18
                  "Value" equals the aggregate fair market value of the
distribution described in paragraph (g)(D)(6), as determined in good faith by
the Board of Directors of the Company pursuant to a resolution;

                  "CP" equals the Conversion Price immediately prior to the
Conversion Price Adjustment Event;

                  "ACP" equals the Conversion Price immediately after the
Conversion Price Adjustment Event.

                  An adjustment made pursuant to paragraph (g)(D) shall become
effective: (A) in the case of a Conversion Price Adjustment Event described in
paragraph (g)(D)(1), (2), (4) or (6), immediately following the close of
business on the record date for the determination of holders of Common Stock
entitled to participate in such event; or (B) in the case of a Conversion Price
Adjustment Event described in paragraph (g)(D)(3), the close of business on the
day upon which such corporate action becomes effective; or (C) in the case of a
Conversion Price Adjustment Event described in paragraph (g)(D)(5), the close of
business on the Trading Day immediately succeeding the Expiration Time of such
tender offer or exchange offer.

                           (8) De Minimis Adjustments. No adjustment in the
Conversion Price shall be required (a) unless such adjustment would require an
increase or decrease of at least 1% of such price or (b) with respect to rights,
options or warrants issued pursuant to the Company's employee benefit plans;
provided, however, that any adjustments which by reason of paragraph
(g)(D))(8)(a) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this paragraph
(g)(D)(8) shall be made by the Company and shall be made to the nearest cent or
to the nearest one-hundredth of a share, as the case may be. No adjustment need
be made for a change in the par value or no par value of the Common Stock.

                           (9) Reductions in Conversion Price. The Company shall
be entitled to make such reductions in the Conversion Price, in addition to
those required by this paragraph (g)(D), as the Company in its discretion shall
determine to be advisable in order that any stock dividends, subdivision of
shares, distribution of rights to purchase stock or securities or distribution
of securities convertible into or exchangeable for stock hereafter made by the
Company to its stockholders shall not be taxable to the recipients. In the event
the Company elects to make such a reduction in the Conversion Price, the Company
will comply with the requirements of Rule 14e-1 under the Exchange Act, and any
other securities laws and regulations thereunder if and to the extent that such
laws and regulations are applicable in connection with the reduction of the
Conversion Price. Whenever the Conversion Price is so decreased, the Company
shall mail to Holders of record of shares of Series D Preferred Stock a notice
of the decrease at least 15 days before the date the decreased Conversion Price
takes effect, and such notice shall state the decreased Conversion Price.

                           (10) Decreases in Conversion Price. The Company from
time to time may decrease the Conversion Price by an amount determined by the
Board of Directors and


                                       18
<PAGE>   19
described in a notice as hereinafter provided for any period of time if the
period is at least 20 days and if the decrease is irrevocable during such
period. Whenever the Conversion Price is so decreased, the Company shall mail to
Holders of record of shares of Series D Preferred Stock a notice of the decrease
at least 15 days before the date the decreased Conversion Price takes effect,
and such notice shall state the decreased Conversion Price and the period it
will be in effect.

                           (11) Distribution of Rights, Options or Warrants. In
the event that, after the issuance of the Series D Preferred Stock, the Company
distributes rights, options or warrants (other than those referred to in
paragraph (g)(D)(2) above and other than a distribution of rights, options or
warrants being made pro rata to the Holders of the Series D Preferred Stock
based upon the number of shares of Common Stock into which the Series D
Preferred Stock is then convertible) pro rata to all holders of shares of Common
Stock, so long as any such rights, options or warrants have not expired or been
redeemed by the Company, the Holder of any shares of Series D Preferred Stock
surrendered for conversion will be entitled to receive upon such conversion, in
addition to the shares of Common Stock then issuable upon such conversion (the
"Conversion Shares"), a number of rights, options or warrants to be determined
as follows:

                                    (a) if such conversion occurs on or prior to
the date (a "Distribution Date") for the distribution to the holders of rights,
options or warrants of separate certificates evidencing such rights, options or
warrants, the same number of rights, options or warrants to which a holder of a
number of shares of Common Stock equal to the number of Conversion Shares is
entitled at the time of such conversion in accordance with the terms and
provisions applicable to the rights, options or warrants; and

                                    (b) if such conversion occurs after such
Distribution Date, the same number of rights, options or warrants to which a
holder of the number of shares of Common Stock into which such Series D
Preferred Stock was convertible immediately prior to such Distribution Date
would have been entitled on such Distribution Date in accordance with the terms
and provisions of and applicable to the rights, options or warrants.

                           (12) Merger or Consolidation. (a) In case of:

                                    (i) any merger or consolidation of the
Company with or into another Person: or

                                    (ii) any safe, transfer or other disposition
to another Person of all or substantially all of the assets of the Company
computed on a consolidated basis; or

                                    (iii) any statutory exchange of securities
with another Person, other than in connection with a merger or acquisition, (any
of the events described in this paragraph (g)(D)(12)(a) being referred to as a
"Transaction"), there will be no adjustment to the Conversion Price except as
required by paragraph (g)(H).

                  Upon the occurrence of a Transaction (other than (x) a
consolidation or merger in which the Company is the resulting or continuing
Person and which does not result in any




                                       19
<PAGE>   20
reclassification or exchange of Common Stock outstanding immediately prior to
the merger or consolidation for cash, securities or other property of another
Person or (y) the sale, transfer, assignment or distribution of shares of
Capital Stock or assets to a subsidiary of the Company) and subject to any
adjustment to the Conversion Price required by paragraph (g)(H)(1), each share
of Series D Preferred Stock then outstanding shall, without the consent of any
Holder of Series D Preferred Stock (except as expressly required by applicable
law), become convertible only into the kind and amount of shares of stock or
other securities (of the Company or another issuer), cash or other property
receivable upon such Transaction by a holder of the number of shares of Common
Stock into which such share of Series D Preferred Stock could have been
converted immediately prior to the effective date of such Transaction, assuming
such holder of Common Stock failed to exercise his rights of election, if any,
as to the kind of amount of securities, cash or other property receivable upon
such Transaction.

                                    (b) The provisions of this paragraph
(g)(D)(12) similarly shall apply to successive Transactions. The provisions of
this paragraph (g)(D)(12), and the provisions of paragraph (g)(H) to the extent
applicable, shall be the sole right of Holders of Series D Preferred Stock in
connection with any Transaction and, except as expressly provided by applicable
law and paragraph (f), such Holders shall have no separate vote thereon.

                           (13) Notice of Adjustment. Whenever the Conversion
Price is adjusted as provided in this paragraph (g)(D) or paragraph (g)(H), the
Company shall promptly file with the Transfer Agent an Officers' Certificate
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment. Promptly after delivery
of such certificate, the Company shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion Price and the date on
which such adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each Holder of Series D Preferred Stock at
such Holder's last address appearing on the register of holders maintained for
that purpose within 20 days of the effective date of such adjustment. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.

                           (14) Deferred Issuance. In any case in which this
paragraph (g)(D) provides that an adjustment shall become effective immediately
after a record date for an event, the Company may defer until the occurrence of
such event issuing to the Holder of any share of Series D Preferred Stock
converted after such record date and before the occurrence of such event the
additional Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment.

                           (15) Treasury Stock. For purposes of this paragraph
(g)(D), the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of Common
Stock. The Company shall not pay any dividend or make any distribution on Common
Stock held in the treasury of the Company.


                                       20
<PAGE>   21
                           (E) In case:

                           (1) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise than in cash out of
its earned surplus; or

                           (2) the Company shall authorize the granting to all
holders of its Common Stock of rights or warrants to subscribe for or purchase
any shares of Capital Stock of any class or of any other rights; or

                           (3) of any reclassification of the Common Stock of
the Company (other than a subdivision or combination of its outstanding Common
Stock), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or the sale
or transfer of all or substantially all the assets of the Company: or

                           (4) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company:

then the Company shall cause to be filed with the Transfer Agent and at each
office or agency maintained for the purpose of conversion of the Series D
Preferred Stock, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the register of Holders 20 days (or 10 days in
any case specified in clause (1) or (2) above) prior to the applicable date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights or warrants, or, if
a record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up. Failure to give
the notice required by this paragraph (g)(E) or any defect therein shall not
affect the legality or validity of any dividend, distribution, right, warrant,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, or the vote upon any such action.

                           (F) The Company shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
shares of Common Stock (or out of its authorized shares of Common Stock held in
the treasury of the Company), for the purpose of effecting the conversion of the
Series D Preferred Stock, the full number of shares of Common Stock then
issuable upon the conversion of all outstanding shares of Series D Preferred
Stock.

                           (G) The Company will pay any and all document, stamp
or similar issue or transfer taxes that may be payable in respect of the issue
or delivery of Common Stock on conversion of the Series D Preferred Stock
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the share of



                                       21
<PAGE>   22
Series D Preferred Stock or the shares of Series D Preferred Stock to be
converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such tax,
or has established to the satisfaction of the Company that such tax has been
paid.

                           (H) (1) Notwithstanding any other provision in the
preceding paragraphs to the contrary, if any Common Stock Change of Control
occurs, then the Conversion Price in effect shall be adjusted immediately after
such Common Stock Change of Control as described below and, each share of the
Series D Preferred Stock shall be convertible solely into common stock of the
kind received by holders of Common Stock as the result of such Common Stock
Change of Control. For purposes of calculating any adjustment to be made
pursuant to this paragraph, immediately after a Common Stock Change of Control,
the Conversion Price in effect immediately prior to such Common Stock Change of
Control, but after giving effect to any prior adjustments, shall be adjusted by
multiplying such Conversion Price by a fraction, of which the numerator shall be
the Purchaser Stock Price (as defined in this paragraph (g)(H)(3)) and the
denominator shall be the Applicable Price (as defined in this paragraph
(g)(H)(3)): provided. however, that in the event of a Common Stock Change of
Control in which (x) 100% of the value of the consideration received by a holder
of Common Stock is common stock of the successor, acquirer, or other third party
(and cash, if any, is paid only with respect to any fractional interest in such
common stock resulting from such Common Stock Change of Control) and (y) all of
the Common Stock will have been exchanged for, converted into, or acquired for,
common stock (and cash only with respect to fractional interests) of the
successor, acquirer or other third party, the Conversion Price in effect
immediately prior to such Common Stock Change of Control shall thereupon be
adjusted by multiplying such Conversion Price by a fraction, of which the
numerator shall be one (1) and the denominator shall be the number of shares of
common stock of the successor, acquirer, or other third party received by a
holder of one share of Common Stock as a result of such Common Stock Change of
Control.

                           (2) If a Non-Stock Change of Control occurs, each
Holder of Series D Preferred Stock may require the Company to redeem all such
Holder's shares of Series D Preferred Stock at a price (the "Repurchase Price")
equal to 100% of the Liquidation Preference, plus accumulated and unpaid
dividends, if any, whether declared or undeclared, to the date fixed for such
redemption (the "Repurchase Date"); provided, however, that no Holder of Series
D Preferred Stock shall have the right to require the redemption or repurchase
of Series D Preferred Stock prior to the date on which the Company's Senior
Notes mature or such earlier date on which the Senior Notes have been paid in
full (the "Debt Maturity Date").

                  Following a Non-Stock Change of Control prior to the Debt
Maturity Date, if the Holders of Series D Preferred Stock, but for the proviso
set forth in the immediately preceding paragraph of this paragraph (H)(2), would
have the right to require the Company to redeem all such Holder's shares of
Series D Preferred Stock, then each Holder of Series D Preferred Stock may,
instead of requiring the Company to redeem or repurchase such Holder's shares of
Series D Preferred Stock, require the Company to convert such Holder's shares of
Series D Preferred Stock into Common Stock on the Repurchase Date as provided
below.



                                       22
<PAGE>   23
                  Subject to the conditions set forth below, the Repurchase
Price shall be, at the option of the Company, payable (v) in cash, (w) through
the delivery of a number of shares of Common Stock equal to the Repurchase Price
divided by the Discounted Stock Value or (x) any combination of (v) and (w). The
"Discounted Stock Value" means the product of (y) 95% and (z) the average of the
daily closing prices of the Common Stock for the five consecutive Trading Days
ending on (and including) the fourth Trading Day preceding such Repurchase Date.
The closing price for each Trading Day will be the last sales price on such date
on the Nasdaq National Market (or the principal securities exchange or other
securities market on which the Common Stock is then being traded). No fractional
shares of Common Stock shall be issued in connection with the payment of the
Repurchase Price. Instead, the Company shall pay to the Transfer Agent for
distribution to the Holders as provided herein cash in lieu of the fractional
portion of one share which may result from the computation of the number of
shares of Common Stock as set forth in the first two sentences of this paragraph
in an amount equal to the same fraction of the last sales price of a share of
Common Stock on the Nasdaq National Market (or the principal national securities
exchange or other securities market on which the Common Stock is then being
traded) on the fourth Trading Day immediately preceding the Repurchase Date. The
Transfer Agent is hereby authorized to aggregate any fractional shares of Common
Stock that would otherwise be distributable in connection with the payment of
the Repurchase Price, and to sell them at the best available price and
distribute the proceeds to the Holders thereof in proportion to their respective
interests. The Company shall reimburse the Transfer Agent for any expenses
incurred with respect to such sale, including brokerage commissions. If the
Company is precluded from paying cash for fractional shares, it shall pay cash
to the Holders for the fractional shares when it becomes legally and
contractually able to pay such cash.

                  The Company may elect to pay the Repurchase Price by
delivering shares of Common Stock only if:

                  (i) The shares of Common Stock of the Company to be issued as
payment of the Repurchase Price (x) shall not require registration under any
federal securities law before such shares may be freely transferable without
being subject to any transfer restrictions under the Securities Act or, if such
registration is required, such registration shall be completed and shall become
effective prior to the Repurchase Date, and (y) shall not require registration
with or approval of any governmental authority under any state law or any other
federal law before such shares may be validly issued or delivered or if such
registration is required or such approval must be obtained, such registration
shall be completed or such approval shall be obtained prior to the Repurchase
Date;

                  (ii) The shares of Common Stock of the Company to be issued
are, or shall have been, approved for listing on the Nasdaq National Market or
the New York Stock Exchange or listed on another national securities exchange,
in any case, prior to the Repurchase Date; and

                  (iii) All shares of Common Stock of the Company which may be
issued as payment of the Repurchase Price will be issued out of the Company's
authorized but unissued Common Stock and, will upon issue, be duly and validly
issued and fully paid and nonassessable and free of any preemptive or similar
rights.



                                       23
<PAGE>   24
                  In the event the Company is restricted from repurchasing
shares of the Series D Preferred Stock on the Repurchase Date pursuant to the
terms of its outstanding indebtedness, Holders of the Series D Preferred Stock
may convert each share of Series D Preferred Stock into a number of shares of
Common Stock equal to the Repurchase Price divided by the Discounted Stock
Value.

         In connection with the conversion of shares of Series D Preferred Stock
on the Repurchase Date, the Company shall apply and use its best efforts to have
the shares of Common Stock to be issued upon conversion of the Series D
Preferred Stock approved for listing on the Nasdaq National Market or the New
York Stock Exchange or listing on another national securities exchange prior to
the Repurchase Date. All shares of Common Stock of the Company which may be
issued upon conversion of the Series D Preferred Stock as provided in this
paragraph (H)(2) will be issued out of the Company's authorized but unissued
Common Stock and will, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any pre-emptive or similar rights.

                           In the case of a Repurchase Date falling after a
Record Date and prior to the related Dividend Payment Date, the Holders of the
Series D Preferred Stock at the close of business on such Record Date will be
entitled to receive the dividend payable on such shares on the corresponding
Dividend Payment Date, notwithstanding the redemption or conversion of such
shares following such Record Date. Except as provided for in the preceding
sentence, no payment or allowance will be made for accrued dividends on any
shares of Series D Preferred Stock redeemed or converted pursuant to this
paragraph (H)(2).

                  On and after the Repurchase Date, unless the Company defaults
in the payment of the Repurchase Price or the conversion of the Series D
Preferred Stock, dividends will cease to accumulate on shares of Series D
Preferred Stock to be redeemed or converted and all rights of Holders of such
shares will terminate except for the right to receive the Repurchase Price,
without interest, or the number of shares of Common Stock into which the shares
of the Series D Preferred Stock have been converted.

                  Within 30 days after the occurrence of a Non-Stock Change of
Control, the Company will (a) publish a notice of the occurrence of a Non-Stock
Change of Control in the Wall Street Journal or similar daily business
publication of national distribution and (b) send a written notice by first
class mail to each Holder of record of shares of Series D Preferred Stock, at
its registered address, and to the Transfer Agent (the "Company Notice");
provided, however, that neither the failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the redemption
or conversion of any shares of Series D Preferred Stock to be redeemed or
converted except as to the Holder or Holders to whom the Company has failed to
give said notice or except as to the Holder or Holders whose notice was
defective. The Company Notice shall state:

                  (i) that a Non-Stock Change of Control has occurred,



                                       24
<PAGE>   25
                  (ii) the Repurchase Price, whether shares of the Series D
Preferred Stock will be redeemed or converted, and in the event of a redemption,
whether the Repurchase Price will be paid in cash, through the delivery of
shares of Common Stock, or a combination thereof (and, if a combination thereof,
stating the percentages of the total Repurchase Price that will be paid in cash
and in shares of Common Stock);

                  (iii) in the event of a redemption, if all or a portion of the
Repurchase Price is to be paid through the delivery of shares of Common Stock,
that the determination of the number of shares of Common Stock to be delivered
shall be calculated as set forth above;

                  (iv) in the event of a conversion, that the determination of
the number of shares of Common Stock to be delivered shall be calculated as set
forth above;

                  (v) the Repurchase Date, which shall be no earlier than the 30
days and no later than 60 days following the date of the Company Notice;

                  (vi) that to elect to participate in the redemption or
conversion, as the case may be, the Holder must deliver to the Transfer Agent
the certificate or certificates representing the shares of Series D Preferred
Stock to be redeemed or converted along with a written election to participate,
on or before 5:00 p.m., New York City time, on the 30th day after the date of
the Company Notice;

                  (vii) that unless the Company defaults in the payment of the
Repurchase Price or the conversion of the Series D Preferred Stock, dividends on
the shares of the Series D Preferred Stock tendered to the Company shall cease
to accumulate on such Repurchase Date; and

                  (viii) that any shares of Series D Preferred Stock not
tendered to the Company will continue to accumulate dividends in accordance with
the terms hereof.

                  To exercise the repurchase right or conversion right granted
by this paragraph (H)(2), a Holder of Series D Preferred Stock must surrender
the certificate or certificates representing such shares of Series D Preferred
Stock, duly endorsed (or otherwise in proper form for transfer, as determined by
the Company), together with a written notice of election to participate in the
repurchase right or conversion right, as the case may be, to the Transfer Agent
on or before 5:00 p.m., New York City time, on the 30th day after the date of
the Company Notice, and on the Repurchase Date (A) in the event of a redemption,
the Repurchase Price for such shares shall be payable in cash and/or shares of
Common Stock, as the case may be, to the person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired, or (B) such shares shall be converted
into shares of Common Stock and each surrendered certificate shall be canceled
and retired.

                  On the Repurchase Date, the Company shall, to the extent
lawful, (A) accept for payment or conversion shares of Series D Preferred Stock
validly tendered and (B) promptly deliver the Repurchase Price or the number of
shares of Common Stock into which such shares of Series D Preferred




                                       25
<PAGE>   26
Stock have been converted to each holder of shares of Series D Preferred Stock
validly tendered to the Company. The Company shall publicly announce the results
of the Non-Stock Change of Control offer on or as soon as practicable after the
Repurchase Date.

                  The Company shall comply with any securities laws and
regulations, to the extent such laws and regulations are applicable to the
repurchase or conversion of shares of the Series D Preferred Stock, in
connection with a Non-Stock Change of Control.

                  Notwithstanding the foregoing, the Company shall not be
required to offer to repurchase or convert, and repurchase or convert,
securities tendered pursuant to this paragraph (H)(2) following a Non-Stock
Change of Control if a third party makes the offer to repurchase securities
tendered pursuant to this paragraph (H)(2) in the manner, at the times and
otherwise in compliance with the requirements set forth in this paragraph (H)(2)
and purchases all of the Series D Preferred Stock validly tendered and not
withdrawn pursuant to such provision.

                           (3) For purposes of this paragraph (H), the following
terms shall have the meanings indicated:

                  "Applicable Price" means the average of the closing bid prices
for the Common Stock during the ten Trading Days prior to and including the
record date for the determination of the holders of Common Stock entitled to
receive cash, securities, property or other assets in connection with such
Common Stock Change of Control or, if there is no such record date, the date
upon which the holders of the Common Stock shall have the right to receive such
cash, securities, property or other assets, in each case, as adjusted in good
faith by the Board of Directors to appropriately reflect any of the events
referred to in paragraph (g)(D)(1) through (6).

                  "Beneficial Owner" means a beneficial owner as defined in
Rules 13d-3 and 13d-5 under the Exchange Act (or any successor rules), including
the provision of such Rules that a Person shall be deemed to have beneficial
ownership of all securities that such Person has a right to acquire within 60
days; provided that a Person will not be deemed a beneficial owner of, or to own
beneficially, any securities if such beneficial ownership (1) arises solely as a
result of a revocable proxy delivered in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the Exchange Act and (2)
is not also then reportable on Schedule 13D or Schedule 13G (or any successor
schedule) under the Exchange Act.

                  "Change of Control" means: (i) the sale, lease, transfer,
conveyance, other disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially all the assets
of the Company and its subsidiaries taken as a whole to any "person" (as such
term is used in Section 13(d)(3) of the Exchange Act), (ii) the adoption of a
plan relating to the liquidation, dissolution or winding-up of the Company,
(iii) the consummation of any transaction (including any merger or
consolidation) the result of which is that any "person" (as defined above) other
than any Permitted Holder becomes the Beneficial Owner, directly or indirectly,
of more than 50% of the Voting Stock of the Company plus any voting stock not
yet outstanding but deemed to be Beneficially Owned by such "person" (as defined
above), (iv) the first day on which the Permitted Holders collectively become
the Beneficial Owners, directly or indirectly, of more than 50% of the Voting
Stock of the Company


                                       26
<PAGE>   27
plus any voting stock not yet outstanding but deemed to be Beneficially Owned by
the Permitted Holders, or (v) the first day on which a majority of the members
of the Board of Directors are not Continuing Directors.

                  "Common Stock Change of Control" means any Change of Control
in which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that for each of the ten consecutive Trading Days
referred to in the definition of "Applicable Price" has been admitted for
listing or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on the Nasdaq National Market; provided, however,
that a Change of Control shall not be a Common Stock Change of Control unless
either (i) the Company continues to exist after the occurrence of such Change of
Control and the outstanding shares of Series D Preferred Stock continue to exist
as outstanding shares of Series D Preferred Stock, or (ii) not later than the
occurrence of such Change of Control, the outstanding shares of Series D
Preferred Stock are converted into or exchanged for shares of convertible
preferred stock of a corporation succeeding to the business of the Company,
which convertible preferred stock has powers, preferences and relative,
participating, optional or other rights, and qualifications, limitations and
restrictions, substantially similar to those of the Series D Preferred Stock.

                  "Continuing Directors" means, as of any date of determination,
individuals who on the Issue Date constituted the Board of Directors (together
with any new directors whose election by the Board of Directors or whose
nomination for election by the Company's stockholders was approved by a vote of
a majority of the members of the Board of Directors then in office who either
were members of the Board of Directors on the Issue Date or whose election or
nomination for election was previously so approved).

                  "Non-Stock Change of Control" means any Change of Control
other than a Common Stock Change of Control.

                  "Permitted Holders" means: (i) Providence Equity Partners
Inc., JK&B Capital, L.P., or any of their affiliates, (ii) any of Maurice J.
Gallagher, Jr., Timothy P. Flynn, Rolla P. Huff or their respective spouses or
lineal descendants and their respective spouses (collectively, the "Individual
Family Holders") whether acting in their own name or as a majority of persons
having the power to exercise the voting rights attached to, or having investment
power over, shares held by others, (iii) any affiliate of any member of the
Individual Family Holders, (iv) any trust principally for the benefit of one or
more members of the Individual Family Holders (whether or not any member of the
Individual Family Holders is a trustee of such trust) and (v) any charitable
foundation whose majority of members, trustees or directors, as the case may be,
are persons referred to in (ii) above.

                  "Purchaser Stock Price" means, the product of (i) the number
of shares of common stock received as consideration in such Common Stock Change
of Control for each share of Common Stock, and (ii) the average of the per share
closing bid prices for the common stock received as consideration in such Common
Stock Change of Control for the ten consecutive Trading Days prior to and
including the record date for the determination of the




                                       27
<PAGE>   28
holders of Common Stock entitled to receive such common stock, or if there is no
such record date, the date upon which the holders of the Common Stock shall have
the right to receive such common stock, in each case, as adjusted in good faith
by the Board of Directors to appropriately reflect any of the events referred to
in paragraph (g)(D)(1) through (6); provided, however, that if no such closing
bid prices exist, then the Purchaser Stock Price shall be set at a price
determined in good faith by the Board of Directors of the Company.

        "13% Senior Notes" means the Company's 13% Senior Notes due 2010.

        "Senior Notes" means the Company's Senior Secured Notes and Senior
Notes.

        "Senior Secured Notes" means the Company's 13% Senior Secured
Notes due 2004.

         (h) Reissuance of Series D Preferred Stock. Shares of Series D
Preferred Stock that have been issued and reacquired in any manner, including
shares purchased, redeemed, converted or exchanged, shall not be reissued as
shares of Series D Preferred Stock and shall (upon compliance with any
applicable provisions of the laws of Delaware) have the status of authorized and
unissued shares of Preferred Stock undesignated as to series and may be
redesignated and reissued as part of any series of Preferred Stock; provided,
however, that so long as any shares of Series D Preferred Stock are outstanding,
any issuance of such shares must be in compliance with the terms hereof. Upon
any such reacquisitions, the number of shares of Series D Preferred Stock
authorized pursuant to this Certificate of Designation shall be reduced by the
number of shares so acquired.

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

         (j) Limitation on Mergers and Asset Sales. Without the vote or consent
of the holders of a majority of the then outstanding shares of Series D
Preferred Stock, the Company may not consolidate or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets to, any Person unless: (A)(1) the successor, transferee or lessee
(if not the Company) is organized and existing under the laws of the United
States of America or any State thereof or the District of Columbia; (2) the
Series D Preferred Stock shall be converted into or exchanged for and shall
become shares of such successor, transferee or lessee, having in respect of such
successor, transferee, or lessee substantially the same powers, preference and
relative participating, optional or other special rights and the qualifications,
limitations or restrictions thereon, that the Series D Preferred Stock had
immediately prior to such transaction; and (3) the Company delivers to the
Transfer Agent an Officers' Certificate and an Opinion of Counsel stating that
such consolidation, merger or transfer complies with this Certificate of
Designation, or (B)(1) the consideration received by the holders of Common
Stock consists entirely of cash, (2) upon consummation of such transaction, each
share of Series D Preferred Stock shall be converted into or exchanged for cash
in an amount at least equal to the greater of (a) the amount which would he paid
to a holder of the number of shares of Common Stock into which such share of
Series D Preferred Stock could convert immediately prior to the consummation of
such transaction and (b) the liquidation preference of such share of Series D
Preferred Stock plus all accumulated and unpaid dividends, if any, whether or
not declared, to the date of the consummation of such transaction and (3) the



                                       28
<PAGE>   29
Company delivers to the Transfer Agent an Officers' Certificate and an Opinion
of Counsel stating that such consolidation, merger or transfer complies with
this Certificate of Designation, or (C)(1) the consideration to be received by
the holders of Common Stock in respect of each share of Common Stock has a value
which, for any five Business Days during the period commencing on the date that
the Company publicly announces such consolidation, merger or transfer and ending
ten Business Days thereafter, is equal to or greater than 140% of the Conversion
Price in effect on the date of such public announcement by the Company, (2) the
Consolidated Net Worth of the successor, transferee or lessee is equal to or
exceeds an amount equal to the product of two, multiplied by the Consolidated
Net Worth of the Company immediately prior to such consolidation, merger, or
transfer, and (3) the Company delivers to the Transfer Agent an Officers'
Certificate and an Opinion of Counsel stating that such consolidation, merger or
transfer complies with this Certificate of Designation.

                  For purposes of this paragraph (j), "Consolidated Net Worth"
shall mean, in respect of any Person, the total amount shown on the balance
sheet of such Person and its consolidated subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting principles,
as of the end of the most recent fiscal quarter of such Person for which
internal financial statements are then available, prior to the taking of any
action for which the determination is made, as (i) the par or stated value of
all of the outstanding capital stock of such Person, plus (ii) paid-in capital
or capital surplus relating to such capital stock, plus (iii) any retained
earnings or earned surplus, less any accumulated deficit.

                  In the event of any consolidation or merger or conveyance,
transfer or lease of all or substantially all of the assets of the Company that
is permitted pursuant to this paragraph (j), the successor resulting from such
consolidation or into which the Company is merged or the transferee or lessee to
which such conveyance, transfer or lease is made, will succeed to, and be
substituted for, and may exercise every right and power of, the Company with
respect to the Series D Preferred Stock, and thereafter, except in the case of a
lease, the predecessor (if still in existence) shall be released from its
obligations and covenants with respect to the Series D Preferred Stock.

         (k) Certificates.

                  (i) Form and Dating. The Series D Preferred Stock and the
Transfer Agent's certificate of authentication shall be substantially in the
form of Exhibit A, which is hereby incorporated in and expressly made a part of
this Certificate of Designation. The Series D Preferred Stock certificate may
have notations, legends or endorsements required by law, stock exchange rules,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Series D Preferred Stock certificate shall be dated the date of its
authentication. The terms of the Series D Preferred Stock certificate set forth
in Exhibit A are part of the terms of this Certificate of Designation.

                  (ii) Execution and Authentication. Two Officers shall sign the
Series D Preferred Stock certificates for the Company by manual or facsimile
signature. The Company's




                                       29
<PAGE>   30
seal shall be impressed, affixed, imprinted or reproduced on the Series D
Preferred Stock certificates and may be in facsimile form.

                  If an Officer whose signature is on a Series D Preferred Stock
certificate no longer holds that office at the time the Transfer Agent
authenticates the Series D Preferred Stock certificate, the Series D Preferred
Stock certificates shall be valid nevertheless. A Series D Preferred Stock
certificate shall not be valid until an authorized signatory of the Transfer
Agent manually signs the certificate of authentication on the Series D Preferred
Stock certificate. The signature shall be conclusive evidence that the Series D
Preferred Stock certificate has been authenticated under this Certificate of
Designation. The Transfer Agent shall authenticate and deliver certificates for
up to 4,250,000 shares of Series D Preferred Stock for original issue upon a
written order of the Company signed by two Officers of the Company. Such order
shall specify the number of shares of Series D Preferred Stock to be
authenticated and the date on which the original issue of Series D Preferred
Stock is to be authenticated.

                  The Transfer Agent may appoint an authenticating agent
reasonably acceptable to the Company to authenticate the certificates for Series
D Preferred Stock. Unless limited by the terms of such appointment, an
authenticating agent may authenticate certificates for Series D Preferred Stock
whenever the Transfer Agent may do so. Each reference in this Certificate of
Designation to authentication by the Transfer Agent includes authentication by
such agent. An authenticating agent has the same rights as the Transfer Agent or
agent for service of notices and demands.

                  (iii) Transfer and Exchange of Shares of Series D Preferred
Stock. (A) When shares of Series D Preferred Stock are presented to the Transfer
Agent with a request to register the transfer of such shares of Series D
Preferred Stock or to exchange such shares of Series D Preferred Stock for an
equal number of shares of Series D Preferred Stock of other authorized
denominations, the Transfer Agent shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met; provided, however, that the certificate representing such shares of Series
D Preferred Stock surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form reasonably satisfactory
to the Company and the Transfer Agent, duly executed by the Holder thereof or
its attorney duly authorized in writing.

                           (B) Obligations with Respect to Transfers and
Exchanges of Series D Preferred Stock. (1) To permit registrations of transfers
and exchanges, the Company shall execute and the Transfer Agent shall
authenticate certificates representing shares of Series D Preferred Stock as
required pursuant to the provisions of this paragraph (k)(iii).

                           (2) All shares of Series D Preferred Stock issued
upon any registration of transfer or exchange of shares of Series D Preferred
Stock shall be the valid obligations of the Company, entitled to the same
benefits under this Certificate of Designation as the shares of Series D
Preferred Stock surrendered upon such registration of transfer or exchange.



                                       30
<PAGE>   31
                           (3) Prior to due presentment for registration of
transfer of any shares of Series D Preferred Stock, the Transfer Agent and the
Company may deem and treat the person in whose name such shares of Series D
Preferred Stock are registered as the absolute owner of such Series D Preferred
Stock and neither the Transfer Agent nor the Company shall be affected by notice
to the contrary.

                           (4) No service charge shall be made to a Holder for
any registration of transfer or exchange upon surrender of any certificate
representing shares of Series D Preferred Stock or shares of Common Stock at the
office of the Transfer Agent maintained for that purpose. However, the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Series D Preferred Stock certificates or Common Stock certificates.

                           (C) No Obligation of the Transfer Agent. The Transfer
Agent shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Certificate of
Designation or under applicable law with respect to any transfer of any interest
in any Series D Preferred Stock other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by, the terms of this Certificate of
Designation, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.

         (iv) Replacement Certificates. If a modified Series D Preferred Stock
certificate is surrendered to the Transfer Agent or if the Holder of a Series D
Preferred Stock certificate claims that the Series D Preferred Stock certificate
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Transfer Agent shall countersign a replacement Series D Preferred Stock
certificate if the reasonable requirements of the Transfer Agent and of Section
8-405 of the Uniform Commercial Code as in effect in the State of New York are
met. If required by the Transfer Agent or the Company, such Holder shall furnish
an indemnity bond sufficient in the judgment of the Company and the Transfer
Agent to protect the Company and the Transfer Agent from any loss which either
of them may suffer if a Series D Preferred Stock certificate is replaced. The
Company and the Transfer Agent may charge the Holder for their expenses in
replacing a Series D Preferred Stock certificate.

         (v) Temporary Certificates. Until definitive Series D Preferred Stock
certificates are ready for delivery, the Company may prepare and the Transfer
Agent shall countersign temporary Series D Preferred Stock certificates.
Temporary Series D Preferred Stock certificates shall be substantially in the
form of definitive Series D Preferred Stock certificates but may have variations
that the Company considers appropriate for temporary Series D Preferred Stock
certificates. Without unreasonable delay, the Company shall prepare and the
Transfer Agent shall countersign definitive Series D Preferred Stock
certificates and deliver them in exchange for temporary Series D Preferred Stock
certificates.



                                       31
<PAGE>   32
         (vi) Cancellation. In the event the Company shall purchase or otherwise
acquire shares of Series D Preferred Stock, the certificate(s) representing the
same shall thereupon be delivered to the Transfer Agent for cancellation.

                  The Transfer Agent and no one else shall cancel and destroy
all Series D Preferred Stock certificates surrendered for transfer, exchange,
replacement or cancellation and deliver a certificate of such destruction to the
Company unless the Company directs the Transfer Agent to deliver canceled Series
D Preferred Stock certificates to the Company. The Company may not issue new
Series D Preferred Stock certificates to replace Series D Preferred Stock
certificates to the extent they evidence Series D Preferred Stock which the
Company has purchased or otherwise acquired.

                  (7) Certain Definitions. As used in this Certificate of
Designation, the following terms shall have the following meanings (and (1)
terms defined in the singular have comparable meanings when used in the plural
and vice versa, (2) "including" means including without limitation, (3) "or" is
not exclusive, (4) "to" any date means to and including such date and (5) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with United States generally accepted accounting principles as in
effect on the Issue Date and all accounting calculations will be determined in
accordance with such principles), unless the content otherwise requires:

                  "Business Day" means each day which is not a Legal Holiday.

                  "Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated.
whether voting or non-voting) in equity of such Person, whether now outstanding
or issued after the Issue Date, including all Common Stock and Preferred Stock.

                  "Common Stock" means the Company's common stock, par value
$0.001 per share.

                  "Dividend Period" means such period between two consecutive
Dividend Payment Dates and the period from the Issue Date to the first Dividend
Payment Date.

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

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

                  "Issue Date" means the date on which the Series D Preferred
Stock is initially issued.

                  "Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions are not required to be open in the State of New York.



                                       32
<PAGE>   33
                  "Officer" means the Chairman of the Board of Directors, the
President, any Vice President, the Treasurer, the Secretary, any Assistant
Secretary or Assistant Treasurer of the Company.

                  "Officers' Certificate" means a certificate signed by two
Officers.

                  "Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Transfer Agent. The counsel may be an employee
of or counsel to the Company or the Transfer Agent.

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

                  "Preferred Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the Issue Date, including all series and
classes of such preferred or preference stock.

                  "SEC" or "Commission" means the Securities and Exchange
Commission.

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

                  "Series C Preferred Stock" means the 1,250,000 shares of the
Company's Preferred Stock which, as of the Issue Date, have been designated as
the Series C Convertible Preferred Stock.

                  "Subsidiary" means with respect to any Person, any
corporation, association or other business entity of which Voting Stock
representing more than 50% of the voting power of shares of outstanding Voting
Stock is owned, directly or indirectly, by such Person, or one or more other
Subsidiaries of such Person.

                  "Transfer Agent" means the transfer agent for the Series D
Preferred Stock appointed by the Company, which initially shall be Continental
Stock Transfer and Trust Company.

                  "Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.

                  (8) SEC Reports and Reports to Holders. So long as any shares
of Series D Preferred Stock remain outstanding, the Company will file with the
SEC (whether or not the Company is required to do so) all such reports and other
information as the Company would be




                                       33
<PAGE>   34
required to file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange
Act. Upon the written request of a Holder of Series D Preferred Stock, the
Company will supply to such Holder, at no cost to such Holder, copies of such
reports or other information.



                  [Signature page follows on the next page]
                                       34
<PAGE>   35
         IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be signed by its President, and attested to by its Secretary, on
[___________], 2001.

                                               MPOWER HOLDING CORPORATION



                                               By: __________________________
                                                    Name:
                                                    Title:  President


Attest:


________________________
Name:
Title:  Secretary

                                   Sworn to this ___ day of _________, 2001
                                   By  _______________________________
                                                     Notary Public


                                       35
<PAGE>   36
                                    EXHIBIT A

                        FORM OF SERIES D PREFERRED STOCK

                                FACE OF SECURITY

Certificate Number: [   ]
Number of Shares of Series D Preferred Stock:  [   ]
CUSIP NO.:  [   ]

              7.25% Series D Cumulative Convertible Preferred Stock
                          (par value $0.001 per share)
                    (liquidation preference $50.00 per share)

                                       of

                           Mpower Holding Corporation

         Mpower Holding Corporation, a Delaware corporation (the "Company"),
hereby certifies that [_______________] (the "Holder") is the registered owner
of fully paid and non-assessable preferred securities of the Company designated
the 7.25% Series D Cumulative Convertible Preferred Stock (par value $0.001 per
share) (liquidation preference $50.00 per share) (the "Series D Preferred
Stock"). The shares of Series D Preferred Stock are transferable on the books
and records of the Transfer Agent, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The Series D Preferred Stock represented hereby are issued and shall
in all respects be subject to the provisions of the Certificate of Designation
of Series D Cumulative Convertible Preferred Stock dated [_______], 2001, as the
same may be amended from time to time (the "Certificate of Designation").
Capitalized terms used herein but not defined shall have the meaning given them
in the Certificate of Designation. The Company will provide a copy of the
Certificate of Designation to a Holder without charge upon written request to
the Company at its principal place of business.

         Reference is hereby made to select provisions of the Series D Preferred
Stock set forth on the reverse hereof, and to the Certificate of Designation.
which select provisions and the Certificate of Designation shall for all
purposes have the same effect as if set forth at this place. upon receipt of
this certificate. the I folder is bound by the Certificate of Designation and is
entitled to the benefits thereunder.

         This certificate is not valid unless countersigned and registered by
the Transfer Agent.


A-1
<PAGE>   37
         IN WITNESS WHEREOF, the Company has executed this certificate this [ ]
day of [ ], 2001.

                                       MPOWER HOLDING CORPORATION



                                       By:___________________________
                                            Name:
                                            Title:

[Seal]

                                       By:___________________________
                                            Name:
                                            Title:


                                      A-2
<PAGE>   38
                               REVERSE OF SECURITY

         Dividends on each share of Series D Preferred Stock shall be payable at
a rate per annum set forth in the face hereof or as provided in the Certificate
of Designation. Dividends may be paid in cash or in shares of Common Stock of
the Company, at the option of the Company.

         The shares of Series D Preferred Stock shall be redeemable as provided
in the Certificate of Designation and in the Certificate. The shares of Series D
Preferred Stock shall be convertible into the Company's Common Stock in the
manner and according to the terms set forth in the Certificate of Designation.

         As required under Delaware law, the Company shall furnish to any Holder
upon request and without charge, a statement setting forth in full or
summarizing the voting powers, designations, preferences, limitations,
restrictions and relative rights of the various classes of stock of the Company
or series thereof. All such requests should be directed to Mpower Holding
Corporation, 175 Sully's Trail, Pittsford, New York 14534, Attention: General
Counsel.


                                      A-3
<PAGE>   39
                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned assigns and transfers the
shares of Series D Preferred Stock evidenced hereby to:_________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)


and irrevocably appoints:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

agent to transfer the shares of Series D Preferred Stock evidenced hereby on the
books of the Transfer Agent. The agent may substitute another to act for him or
her.

Date:_______________________________

Signature: ___________________________
(Sign exactly as your name appears on the other side of this Series D Preferred
Stock Certificate)

Signature

Guarantee:(1) __________________________________________________________________


_________________

(1)        (Signature must be guaranteed by an "eligible guarantor institution"
         that is, a bank, stockbroker, savings and loan association or credit
         union meeting the requirements of the Transfer Agent, which
         requirements include membership or participation in the Securities
         Transfer Agents Medallion Program ("STAMP") or such other "signature
         guarantee program" as may be determined by the Transfer Agent in
         addition to, or in substitution for, STAMP, all in accordance with the
         Securities Exchange Act of 1934, as amended.)


                                      A-4
<PAGE>   40
                                    EXHIBIT B

                              NOTICE OF CONVERSION

                    (To be Executed by the Registered Holder

                in order to Convert the Series D Preferred Stock)

The undersigned hereby irrevocably elects to convert (the "Conversion") shares
of 7.25% Series D Cumulative Convertible Preferred Stock (the "Series D
Preferred Stock"), represented by stock certificate No(s). _________ (the
"Series D Preferred Stock Certificates") into shares of Common Stock ("Common
Stock") of Mpower Holding Corporation (the "Company") according to the
conditions of the Certificate of Designation of the Series D Preferred Stock
(the "Certificate of Designation"), as of the date written below. 1f shares are
to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith payment of all applicable taxes or evidence that such taxes have been
paid. No fee will be charged to the holder for any conversion, except for
transfer taxes, if any. A copy of each Series D Preferred Stock Certificate is
attached hereto (or evidence of loss, theft or destruction thereof).*

Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in or pursuant to the Certificate of Designation.

Date of Conversion:____________________

Conversion Price:______________________

Number of shares of Series D Preferred Stock to be Converted:________

Number of shares of Common Stock to be Issued:_______________________

Signature:__________________________

Name:_______________________________

Address: ** ________________________

Fax No.: ___________________________


_________________

*        The Company is not required to issue shares of Common Stock until the
         original Series D Preferred Stock Certificate(s) (or evidence of loss,
         theft or destruction thereof and indemnity reasonably satisfactory, to
         the Company and the Transfer Agent) to be converted are received by the
         Company or its Transfer Agent. The Company shall issue and deliver
         shares of Common Stock by hand or by delivery to an overnight courier
         not later than three business days following receipt of the original
         Series D Preferred Stock Certificate(s) to be converted.

**       Address where shares of Common Stock and any other payments or
         certificates shall be sent by the Company.


                                      B-1