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                           KMC TELECOM HOLDINGS, INC.


                    CERTIFICATE OF THE POWERS, DESIGNATIONS,
                     PREFERENCES AND RIGHTS OF THE SERIES A
                     CUMULATIVE CONVERTIBLE PREFERRED STOCK,
                            PAR VALUE $.0l PER SHAPE

                     Pursuant to Sections 141 and 242 of the
                General Corporation Law of the State of Delaware

As  contemplated  by Sections 141 and 242 of the General  Corporation Law of the
State of Delaware (the "DGCL"), the following resolution was duty adopted by the
Board  of  Directors  of  KMC  Telecom   Inc.,  a  Delaware   corporation   (the
"Corporation"), by unanimous written consent, dated April 30, 1999:

          WHEREAS,  the Board of Directors  of the  Corporation  is  authorized,
within  the   limitations  and   restrictions   stated  in  the  Certificate  of
Incorporation  of the  Corporation,  to propose by resolution or resolutions for
the  amendment  of  outstanding  series of preferred  stock,  par value $.0l per
share, of the Corporation,  to contain such voting powers,  full or limited,  or
without  voting  powers,  and  such  designations,   preferences  and  relative,
participating, optional or other special rights, and qualifications, limitations
or  restrictions  as  shall  be  stated  and  expressed  in  the  resolution  or
resolutions  providing  for  the  amendment  thereof  adopted  by the  Board  of
Directors,  and as are not stated and  expressed  in the  Amended  and  Restated
Certificate of Incorporation,  or any amendment thereto,  including (but without
limiting the  generality  of the  foregoing)  such  provisions as may be desired
concerning  voting,  redemption,  dividends,  dissolution or the distribution of
assets and such other  subjects  or  matters  as may be fixed by  resolution  or
resolutions of the Board of Directors under the DGCL;
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                                                                               2


          WHEREAS,  the Board of Directors of the  Corporation,  pursuant to its
authority  under  Section  242 of the  DGCL,  deems it  advisable  to amend  and
restated the terms of its Series A Cumulative Convertible Preferred Stock;

          NOW, THEREFORE, BE IT RESOLVED:

          1.   DESIGNATION  AND  NUMBERS  OF  SHARES.   There  shall  be  hereby
established  a series of  preferred  stock  designated  as "Series A  Cumulative
Convertible  Preferred Stock" (such Series being hereinafter  referred to as the
"Series  A  Preferred  Stock").  The  authorized  number  of  shares of Series A
Preferred  Stock shall be 123,800.  The  liquidation  preference of the Series A
Preferred Stock shall be $100 per share (the "Liquidation Preference").

          2. RANK. The Series A Preferred Stock shall,  with respect to dividend
distributions  and   distributions   upon  the  liquidation,   winding-up,   and
dissolution of the  Corporation,  rank (i) senior to the Common Stock, par value
$.0l per share, of the Corporation (the "Common  Stock");  (ii) on a parity with
(A) each class or series of Capital  Stock,  other than the Common Stock and the
Senior  Preferred Stock, and (B) the Parity Preferred Stock; and (iii) junior to
the Senior  Preferred  Stock (the  Common  Stock and the  classes  and series of
Capital Stock described in clause (ii) of this Section are collectively referred
to as the "Junior Stock"). The Series A Preferred Stock shall also, with respect
to any redemption or repurchase by the  Corporation  of its Capital Stock,  rank
junior with respect to the Senior Preferred Stock, except as provided in Section
3 of the Shareholders Agreement

          3. DIVIDENDS.

          (a) Beginning on the date of issuance of the Series A Preferred Stock,
the  holders of the  outstanding  shares of Series A  Preferred  Stock  shall be
entitled to receive,  when,  as and if declared by the Board of Directors of the
Corporation,  out of funds legally  available  therefor,  cash dividends on each
share  of  Series  A  Preferred  Stock at an  annual  rate  equal to 7.0% of the
Liquidation Preference,  payable quarterly in arrears on the applicable Dividend
Payment Date or the next  succeeding  Business Day, if the  applicable  Dividend
Payment Date is not a Business Day.  Notwithstanding the foregoing, the dividend
payable on each share of Series A  Preferred  Stock with  respect to the Initial
Dividend  Period  shall  be  equal  to (i)  7.0% of the  Liquidation  Preference
multiplied  by (ii) a  fraction  equal  to (A) the  number  of  days  from  (and
including)  the  Series A  Preferred  Stock  Issue Date to (but  excluding)  the
Dividend Payment Date with respect to the Initial Dividend Period divided by (B)
365. All dividends shall be cumulative,  whether or not earned or declared, from
the date of  issuance  of the  Series A  Preferred  Stock and  shall be  payable
quarterly in arrears on each  Dividend  Payment  Date,  commencing  on the first
Dividend  Payment  Date after the date of  issuance  of the  Series A  Preferred
Stock. If any dividend (or portion thereof) payable on any Dividend Payment Date
is not declared or paid in full on such  Dividend  Payment  Date,  the amount of
such dividend  payable that is not paid on such date shall  increase at the rate
of 7.0% per annum  (compounded  quarterly on each  subsequent  Dividend  Payment
Date) from such Dividend  Payment Date until paid in full. Each  distribution on
the  Series A  Preferred  Stock  shall be  payable  to holders of record as they

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                                                                               3


appear on the stock books of the Corporation on such record dates, not less than
ten (10) nor more than sixty (60) days  preceding the related  Dividend  Payment
Date, as shall be fixed by the Board of Directors of the Corporation.

          (b) All  accumulated  and unpaid  dividends  on the Series A Preferred
Stock shall be paid by the  Corporation  upon the  occurrence  of a  Realization
Event,  without  reference to any regular  Dividend  Payment Date, to holders of
record on such date. The Corporation shall send by first class,  postage prepaid
mail a notice of the  Realization  Event to all  holders  of Series A  Preferred
Stock that are entitled to receive such dividends.  In the case of a Realization
Event which is an initial  public  offering,  if any such holder  gives  written
notice to the  Corporation  that such holder wishes to receive such  accumulated
unpaid  dividends  in the form of shares of  Common  Stock in lieu of cash,  the
Corporation,  in lieu of a cash  payment,  shall  issue to such  holder  on such
Dividend  Payment Date, a number of shares of Common Stock equal to the quotient
obtained by dividing (x) the aggregate  accumulated and unpaid  dividends on the
shares of Series A Preferred Stock held by such holder by (y) the price at which
shares  of  Common  Stock  are  sold  in  such  offering  (before  deduction  of
underwriting discounts and expenses of sale).

          (c) All  dividends  paid with  respect to shares of Series A Preferred
Stock  pursuant to Section 3(a) shall be paid pro rata and in like manner to all
of the holders entitled thereto.

          (d)  Nothing  herein   contained   shall  in  any  way  or  under  any
circumstances  be  construed  or deemed to require the Board of Directors of the
Corporation to declare, or the Corporation to pay or set apart for payment,  any
dividends on shares of the Series A Preferred  Stock at any time,  nor to permit
the Board of Directors of the Corporation to declare,  or the Corporation to pay
or set apart for  payment,  any  dividends  on shares of the Series A  Preferred
Stock  prior to the  payment  of any  dividends  accrued on shares of the Senior
Preferred Stock.

          4. LIQUIDATION PREFERENCE.

          (a)  In  the  event  of  any  voluntary  or  involuntary  liquidation,
dissolution  or  winding-up  of the affairs of the  Corporation,  the holders of
shares of Parity  Preferred Stock  (including the Series A Preferred Stock) then
outstanding shall be entitled to be paid for each share held thereby, out of the
assets of the Corporation  available for  distribution to its  stockholders,  an
amount in cash equal to the Liquidation  Preference plus an amount in cash equal
to  all  accumulated  and  unpaid  dividends  thereon  (calculated  pursuant  to
Paragraph  3(a)) to the date fixed for  liquidation,  dissolution  or winding-up
(including  an amount equal to a prorated  dividend for the period from the last
Dividend  Payment  Date  to the  date  fixed  for  liquidation,  dissolution  or
winding-up),  before any payment shall be made or any assets  distributed to the
holders of any shares of Junior Stock,  but after all  liquidation  payment have
been made to the  holders of all  shares of Senior  Preferred  Stock.  Except as
provided  in the  preceding  sentence,  holders  of the Parity  Preferred  Stock
(including  the  Series  A  Preferred  Stock)  shall  not  be  entitled  to  any
distribution in the event of any  liquidation,  dissolution or winding-up of the
affairs of the Corporation.  If the assets of the Corporation are not sufficient
to pay in full the  foregoing  liquidation  payments  payable to the  holders of
outstanding  shares  of the  Parity  Preferred  Stock  (including  the  Series A
Preferred  Stock),  then the  holders  of all shares of Parity  Preferred  Stock

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                                                                               4


(including   the  Series  A  Preferred   Stock)  shall  share  ratably  in  such
distribution  of assets in  accordance  with the amount that would be payable on
such  distribution if the amounts to which the holders of outstanding  shares of
Parity  Preferred  Stock  (including the Series A Preferred  Stock) are entitled
were paid in full. If all of the foregoing  liquidation payments with respect to
any share of Series A  Preferred  Stock  have been  made,  such share may not be
converted into Common Stock pursuant to Section 5.

          (b) For the purposes of this Section 4,  neither the  voluntary  sale,
conveyance,  exchange or transfer  (for cash,  shares of stocks,  securities  or
other  consideration)  of all or  substantially  all or part of the  property or
assets of the  Corporation  nor the  consolidation  or merger of the Corporation
with  one or more  other  corporations  shall  be  deemed  to be a  liquidation,
dissolution  or  winding-up,  voluntary  or  involuntary,  of the affairs of the
Corporation (unless such sale, conveyance, exchange or transfer is in connection
with  a   liquidation,   dissolution   or  winding-up  of  the  affairs  of  the
Corporation).

          5. CONVERSION.

          (a)  CONVERSION  PRICE.  Shares  of  Series  A  Preferred  Stock to be
converted  into shares of Common  Stock  shall be so  converted  initially  at a
conversion  price equal to  $20.633333  per share of Common  Stock,  which price
shall be adjusted as hereinafter  provided (and, as so adjusted,  is hereinafter
sometimes  referred to as the "Conversion  Price"),  with each share of Series A
Preferred  Stock being valued at $100.00 for such purpose (that is, a conversion
rate initially  equivalent to 4.8465266 shares of Common Stock for each share of
Series A Prefer-red  Stock so converted,  which is subject to adjustment (to the
nearest fourth decimal place) as the Conversion Price is adjusted as hereinafter
provided);  PROVIDED,  HOWEVER,  that in no event shall the Conversion  Price be
less than the par value, if any, of the Common Stock.

          (b) AUTOMATIC  CONVERSION  UPON A QUALIFIED  PUBLIC  OFFERING.  Upon a
Qualified  Public  Offering,  each  share of  Series  A  Preferred  Stock  shall
automatically  convert,  without  any action on the part of the holder  thereof,
into shares of Common Stock at the Conversion Price in effect at such time, plus
the right to receive an amount of cash equal to the accumulated unpaid dividends
on such share of Series A  Preferred  Stock to and  including  such date (or the
right to receive  additional  shares of Common  Stock in lieu of cash  dividends
pursuant to Section 3(b)).

          (c) CONVERSION AT THE OPTION OF THE HOLDER.  At any time and from time
to time prior to a Qualified Public Offering,  the holders of Series A Preferred
Stock shall have the right to convert, in whole or in part, each share of Series
A Preferred Stock into shares of Common Stock at the Conversion  Price in effect
at such  time,  plus  the  right  to  receive  an  amount  of cash  equal to the
accumulated  unpaid  dividends on each share of Series A Preferred  Stock to and
including  the  Conversion  Date (as  defined  below);  provided  that,  if such
Conversion Date is prior to a Realization Event, the Corporation may, in lieu of
making a payment  in cash  equal to such  amount,  deliver a number of shares of
Common Stock equal to such amount  divided by the Fair Market Value of one share
of Common Stock. In order to convert shares of Series A Preferred Stock pursuant
to this Section  5(c) the holder  thereof  shall  surrender at the office of the
Corporation  the  certificate  or  certificates  therefor,  duly endorsed to the
Corporation  in blank,  and give  written  notice to the  Corporation  that such
holder elects to convert such shares and shall state in writing therein the name

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                                                                               5


or names  (with  addresses)  in which  such  holder  wishes the  certificate  or
certificates  of Common Stock to be issued.  Shares of Series A Preferred  Stock
shall  be  deemed  to have  been  converted  on the  date of  surrender  of such
certificate or certificates as provided above (the "Conversion  Date"),  and the
person or persons  entitled to receive the shares of Common Stock  issuable upon
such  conversion  shall be treated  for all  purposes  as the  record  holder or
holders of such Common Stock on such date.  As soon as  practicable  on or after
the Conversion  Date, the  Corporation  shall issue and deliver a certificate or
certificates for the number of shares of Common Stock issuable upon conversion.

          (d) FRACTIONAL SHARES; PARTIAL-CONVERSION.  No fractional shares shall
be issued  upon  conversion  of shares of Series A  Preferred  Stock into Common
Stock. In case the number of shares of Series A Preferred  Stock  represented by
the certificate or certificates  surrendered  pursuant to this Section 5 exceeds
the number of shares  converted,  the Corporation  shall,  upon such conversion,
execute  and deliver to the holder,  at the  expense of the  Corporation,  a new
certificate or certificates for the number of shares of Series A Preferred Stock
represented by the certificate or certificates  surrendered  which are not to be
converted.  If any  fractional  share of  Common  Stock  would,  except  for the
provisions of the first  sentence of this Section  5(d), be delivered  upon such
conversion, the Corporation,  in lieu of delivering such fractional share, shall
pay to the holder  surrendering  the Series A Preferred  Stock for conversion an
amount in cash equal to the current  market  price of such  fractional  share as
determined in good faith by the Board of Directors.

          (e)  ADJUSTMENT  OF  CONVERSION  PRICE UPON  ISSUANCE OF COMMON STOCK.
Except as  provided in Section  5(f),  if and  whenever  the  Corporation  shall
hereafter issue or sell, or is, in accordance  with  subsection  5(e)(1) through
5(e)(6),  deemed to have  issued  or sold,  any  shares  of  Common  Stock for a
consideration  per share less than the  Conversion  Price in effect  immediately
prior to the time of such  issue or sale,  then,  forthwith  upon such  issue or
sale, the Conversion  Price shall be reduced to the price determined by dividing
(i) an amount  equal to the sum of (a) the  number  of  shares  of Common  Stock
outstanding  immediately  prior  to such  issue or sale  (determined  on a Fully
Diluted  basis)  multiplied  by the then existing  Conversion  Price and (b) the
consideration,  if any,  received by the Corporation upon such issue or sale, by
(ii) the total number of shares of Common Stock  outstanding  immediately  after
such issue or sale (determined on a Fully Diluted basis).

          For purposes of this Section 5(e), the following  subsections  5(e)(1)
to 5(e)(6) shall also be applicable:

          5(e)(1)  ISSUANCE OF RIGHTS OR OPTIONS.  In case at any time hereafter
the Corporation  shall in any manner grant (whether directly or by assumption in
a merger or otherwise) any Options to purchase  Common Stock or any  Convertible
Securities,  whether or not such Options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such  Convertible  Securities  (determined by dividing
(i) the total  amount,  if any,  received or receivable  by the  Corporation  as
consideration  for the  granting of such  Options,  plus the  minimum  aggregate
amount of additional  consideration payable to the Corporation upon the exercise
of all  such  Options,  plus,  in the  case  of such  Options  which  relate  to
Convertible   Securities,   the   minimum   aggregate   amount   of   additional
consideration,  if any,  payable  upon  the  issue  or sale of such  Convertible

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Securities  and upon the  conversion  or  exchange  thereof,  by (ii) the  total
maximum  number of shares of Common  Stock  issuable  upon the  exercise of such
Options or upon the  conversion or exchange of all such  Convertible  Securities
issuable  upon the exercise of such Options)  shall be less than the  Conversion
Price in effect  immediately  prior to the time of the granting of such Options,
then the total  maximum  number of shares  of  Common  Stock  issuable  upon the
exercise of such  Options or upon  conversion  or exchange of the total  maximum
amount of such Convertible Securities issuable upon the exercise of such Options
shall be deemed to have been  issued  for such price per share as of the date of
granting of such  Options or the  issuance of such  Convertible  Securities  and
thereafter  shall be deemed to be outstanding.  Except as otherwise  provided in
subsection 5(e)(3), no adjustment of the Conversion Price shall be made upon the
actual  issue  of such  Common  Stock  or of such  Convertible  Securities  upon
exercise  of such  Options or upon the actual  issue of such  Common  Stock upon
conversion or exchange of such Convertible Securities.

          5(e)(2)  ISSUANCE OF CONVERTIBLE  SECURITIES.  In case the Corporation
shall  hereafter in any manner issue  (whether  directly or by  assumption  in a
merger or  otherwise)  or sell any  Convertible  Securities,  whether or not the
rights to exchange or convert any such  Convertible  Securities are  immediately
exercisable,  and the price per share for which  Common  Stock is issuable  upon
such  conversion  or  exchange  (determined  by  dividing  (i) the total  amount
received or receivable by the Corporation as consideration for the issue or sale
of such Convertible Securities,  plus the minimum aggregate amount of additional
consideration,  if any,  payable  to the  Corporation  upon  the  conversion  or
exchange  thereof,  by (ii) the total  maximum  number of shares of Common Stock
issuable  upon the  conversion or exchange of all such  Convertible  Securities)
shall be less than the Conversion Price in effect  immediately prior to the time
of such issue or sale,  then the total maximum  number of shares of Common Stock
issuable upon conversion or exchange of all such Convertible Securities shall be
deemed to have been  issued for such price per share as of the date of the issue
or sale of such  Convertible  Securities  and  thereafter  shall be deemed to be
outstanding,  provided  that (a) except as  otherwise  provided in  subparagraph
5(e)(3),  no adjustment of the  Conversion  Price should be made upon the actual
issue of such Common  Stock upon  conversion  or  exchange  of such  Convertible
Securities and (b) if any such issue or sale of such  Convertible  Securities is
made upon  exercise of any Options to purchase any such  Convertible  Securities
for  which  adjustments  of the  Conversion  Price  have  been or are to be made
pursuant to other provisions of this Section 5(e), no further  adjustment of the
Conversion Price shall be made by reason of such issue or sale.

          5(e)(3) CHANGE IN OPTION PRICE OR CONVERSION  RATE. Upon the happening
of any of the following  events,  namely,  if the purchase price provided for in
any Option referred to in subsection 5(e)(1), the additional  consideration,  if
any,  payable  upon the  conversion  or exchange of any  Convertible  Securities
referred to in  subsection  5(e)(1) or 5(e)(2) or the rate at which  Convertible
Securities  referred to in subsection 5(e)(1) or 5(e)(2) are convertible into or
exchangeable  for Common  Stock  shall  change at any time  (including,  but not
limited to, changes under or by reason of provisions designed to protect against
dilution),  the  Conversion  Price in  effect  at the time of such  event  shall
forthwith be readjusted to the Conversion  Price which would have been in effect
at such  time had such  Options  or  Convertible  Securities  still  outstanding
provided for such changed purchase price, additional consideration or conversion

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                                                                               7


rate, as the case may be, at the time  initially  granted,  issued or sold,  put
only if as a result  of such  adjustment  the  Conversion  Price  then in effect
hereunder is thereby  reduced;  and on the termination of any such Option or any
such right to convert or exchange such  Convertible  Securities,  the Conversion
Price then in effect  hereunder  shall  forthwith be increased to the Conversion
Price which would have been in effect at the time of such  termination  had such
Option or Convertible Securities, to the extent outstanding immediately prior to
such termination, never been issued.

          5(e)(4)  CONSIDERATION  FOR STOCK. In case any shares of Common Stock,
Options  or  Convertible  Securities  shall  be  issued  or sold for  cash,  the
consideration received therefor shall be deemed to be the amount received by the
Corporation  therefor,  without deduction  therefrom of any expenses incurred or
any  underwriting  commissions or concessions paid or allowed by the Corporation
in  connection  therewith.  In case any  shares  of  Common  Stock,  Options  or
Convertible  Securities  shall be issued or sold for a consideration  other than
cash,  the  amount  of  the  consideration  other  than  cash  received  by  the
Corporation  shall be  deemed  to be the fair  value  of such  consideration  as
determined  in good faith by the Board of  Directors,  without  deduction of any
expenses incurred or any underwriting commissions or concessions paid or allowed
by the Corporation in connection therewith.  In case any Options shall be issued
in connection  with the issue and sale of other  securities of the  Corporation,
together comprising one integral transaction in which no specific  consideration
is  allocated  to such Options by the parties  thereto,  such  Options  shall be
deemed to have been issued for such consideration as determined in good faith by
the Board of Directors of the Corporation.

          5(e)(5)  RECORD DATE. In case the  Corporation  shall take a record of
the holders of its Common Stock for the purpose of entitling them (i) to receive
a dividend or other distribution payable in Common Stock, Options or Convertible
Securities  or (ii) to  subscribe  for or  purchase  Common  Stock,  options  or
Convertible Securities,  then such record date shall be deemed to be the date of
the issue or sale of the shares of Common  Stock  deemed to have been  issued or
sold  upon  the  declaration  of such  dividend  or the  making  of  such  other
distribution  or the  date of the  granting  of such  right of  subscription  or
purchase, as the case may be.

          5(e)(6)  TREASURY  SHARES.  The  number  of  shares  of  Common  Stock
outstanding  at any given time shall not include  shares owned or held by or for
the account of the Corporation,  and the disposition of any such shares shall be
considered  an issue or sale of Common  Stock for the  purpose  of this  Section
5(e).

          (f) EXCEPTIONS TO CONVERSION  PRICE  ADJUSTMENT.  Notwithstanding  the
foregoing,  no adjustment to the Conversion Price shall be made pursuant to this
Section 5 in  connection  with the  grant,  issuance  or sale of  Common  Stock,
Convertible  Securities,  warrants,  options or other rights to subscribe for or
purchase Common Stock or Convertible Securities:  (i) pursuant to employee stock
purchase  or  stock  option  ownership  plans  adopted  by the  Corporation  for
employees,  consultants  and/or directors of the Corporation and its affiliates;
(ii) pursuant to the terms of any Convertible Securities,  warrants,  options or
other rights to subscribe  for or purchase  granted,  issued or sold pursuant to
clause (ii) above; (iii) pursuant to the High Yield Debt and Equity Offering (as
defined in a Subordinated Loan and Security Agreement, dated as of September 22,
1997,  among  KMC  Telecom  Inc.  ("KMC")  and KMC  Telecom  II,  Inc.  and AT&T

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Commercial  Finance  Corporation,  as in effect on the Series C Preferred  Stock
Issue Date) or a subsequent debt offering  occurring prior to December 31, 1998;
(iv) pursuant to the terms of any Convertible Securities,  warrants,  options or
other rights to subscribe  for or purchase  granted,  issued or sold pursuant to
clauses  (iii)  above;  (v)  pursuant to Section 10C of the Amended and Restated
Note  Purchase  and  Investment  Agreement,  dated as of October  22,  1996,  as
amended,  by and  among the  Corporation,  Nassau  Capital  Partners  L.P.,  NAS
Partners I L.L.C.  and Harold N.  Kamine;  or (vi)  pursuant to the  issuance of
Series  C  Cumulative  Convertible  Preferred  Stock  and  Series  D  Cumulative
Convertible  Preferred Stock pursuant to a Purchase Agreement,  by and among the
Corporation,  General Electric Capital Corporation,  CoreStates Holdings,  Inc.,
Nassau  Capital  Partners  L.P.,  NAS Partners I L.L.C.  and the issuance of any
shares of Common Stock issued in conversion thereof, PROVIDED that the aggregate
number of shares of Common Stock issued or issuable  pursuant to clauses (i) and
(ii) above shall not exceed 15% of the Common Stock (on a Fully  Diluted  basis)
outstanding from time to time and the aggregate number of shares of Common Stock
issued or issuable  pursuant to clause (iii) and (iv) above shall not exceed 11%
of the Common Stock (on a Fully Diluted  basis)  outstanding  from time to time;
and FURTHER  PROVIDED  that for the purposes of this Section  5(f):  (a) 221,500
shares of Common Stock initially allocated under the 1997 Stock Option Plan will
be deemed  outstanding  regardless of the number of shares actually  granted and
exercisable  thereunder  and (b) shares of Common Stock issued or issuable  upon
exercise of options not among the 221,500 shares initially allocated pursuant to
the 1997 Stock Option Plan and which, when issued, were subject to clause (i) or
(ii) above,  will not be deemed  outstanding,  regardless of whether or not they
have been granted or are exercisable.

          (g)   SUBDIVISION  OR  COMBINATION  OF  COMMON  STOCK.   In  case  the
Corporation  shall at any time subdivide (by any stock split,  stock dividend or
otherwise)  its  outstanding  shares of Common  Stock  into a greater  number of
shares,  the Conversion  Price in effect  immediately  prior to such subdivision
shall be  proportionately  reduced,  and,  conversely,  in case the  outstanding
shares of Common Stock shall be combined  into a smaller  number of shares,  the
Conversion  Price  in  effect  immediately  prior to such  combination  shall be
proportionately increased.

          (h) REORGANIZATION OR RECLASSIFICATION.  If any capital reorganization
or reclassification of the capital stock of the Corporation shall be effected in
such a way that  holders of Conunon  Stock shall be  entitled to receive  stock,
securities or assets with respect to or in exchange for Common Stock, then, as a
condition  of such  reorganization  or  reclassification,  lawful  and  adequate
provisions  shall be made  whereby  each holder of a share or shares of Series A
Preferred  Stock shall  thereupon have the right to receive,  upon the basis and
upon the terms and  conditions  specified  herein  and in lieu of the  shares of
Common Stock  immediately  theretofore  receivable  upon the  conversion of such
share or shares of Series A Preferred Stock, such shares of stock, securities or
assets as may be issued or payable  with  respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of shares of such
Common Stock  immediately  theretofore  receivable upon such conversion had such
reorganization  or  reclassification  not  taken  place,  and in any  such  case
appropriate provisions shall be made with respect to the rights and interests of
such  holder  to  the  end  that  the  provisions  hereof  (including,   without
limitation, provisions for adjustments of the Conversion Price) shall thereafter
be  applicable,  as  nearly  as may be,  in  relation  to any  shares  of stock,
securities or assets thereafter deliverable upon the exercise of such conversion
rights.


<PAGE>
                                                                               9


          (i) CARRYOVER. Notwithstanding any other provisions of this Section 5,
the  Corporation  shall not be required to make any adjustment to the Conversion
Price unless such  adjustment  would require an increase or decrease of at least
one percent (1%) in the Conversion Price. Any lesser adjustment shall be carried
forward and shall be made no later than the time of, and together with, the next
subsequent  adjustment  which,  together with any  adjustment or  adjustments so
carried forward, shall amount to an increase or decrease of at least one percent
(1%) in the Conversion Price.

          6. OTHER EVENTS. If the Corporation shall make any dividend (excluding
cash dividends payable out of accumulated  earnings and profits) or distribution
on the Common  Stock or issue any Common  Stock,  other  capital  stock or other
security of the Corporation or any rights or warrants to purchase or acquire any
such  security,  which  transaction  does not  result  in an  adjustment  to the
Conversion  Price  pursuant to the  foregoing  provisions of this Section 5, the
Board of Directors may consider  whether such action is of such a nature that an
adjustment to the Conversion  Price should  equitably be made in respect of such
transaction.  If the Board of Directors of the  Corporation  determines  that an
adjustment to the Conversion  Price should be made, an adjustment  shall be made
effective  as of such  date,  as  determined  by the Board of  Directors  of the
Corporation.  The  determination of the Board of Directors of the Corporation as
to whether such an adjustment to the  Conversion  Price should be made,  and, if
so, as to what adjustment should be made and when, shall be final and binding on
the Corporation and all stockholders of the Corporation.  The Corporation  shall
be entitled to make such  additional  adjustments  in the Conversion  Price,  in
addition to those  required by the  foregoing  provisions  of this Section 5, as
shall be  necessary  in order that any  dividend  or  distribution  in shares of
capital stock of the Corporation,  subdivision,  reclassification or combination
of shares of stock of the Corporation or any recapitalization of the Corporation
shall not be taxable to the holders of the Common Stock.

          (k) NOTICE OF ADJUSTMENT. Upon any adjustment of the Conversion Price,
then and in each such case the Corporation shall give written notice thereof, by
delivery in person,  certified or registered mail, return receipt requested,  or
facsimile  addressed  to each  holder  of shares  of  Series A  Preferred  Stock
affected by such  adjustment at the address of such holder as shown on the books
of the Corporation, which notice shall state the Conversion Price resulting from
such adjustment,  setting forth in reasonable  detail the method upon which such
calculation is based.

          6. VOTING RIGHTS.

          (a) The  holders  of Series A  Preferred  Stock,  except as  otherwise
required  under  Delaware law or as set forth below in this Section 6, shall not
be entitled or permitted to vote on any matter required or permitted to be voted
upon by the stockholders of the Corporation.

          (b) So long as the Series A Preferred Stock is outstanding, each share
of Series A Preferred  Stock shall entitle the holder thereof to vote, in person
or by proxy,  at a special  or annual  meeting  of  stockholders  or by  written
consent, on all matters voted on by holders of Common Stock voting together as a
single class with other  shares  entitled to vote  thereon,  except as otherwise
provided in Articles EIGHTH and NINTH of the Corporation's  Amended and Restated

<PAGE>
                                                                              10


Certificate  of  Incorporation.  With  respect to any such  vote,  each share of
Series A Preferred  Stock shall  entitle the holder  thereof to cast a number of
votes  equal to the number of votes  entitled to be cast by such holder had such
holder  converted such share of Series A Preferred Stock into Common Stock prior
to such vote (or, if earlier, the record date with respect to such vote).

          (c) Without  the prior  consent of the  holders of  two-thirds  of the
shares of the Series A Preferred  Stock then  outstanding,  voting as a separate
class, the Corporation shall not:

          (i)  increase  the  number  of shares  of the  Corporation's  Series A
Cumulative Convertible Preferred Stock, par value $.0l per share, outstanding at
any time to more than $12,800,000 of aggregate liquidation preference;

          (ii)  increase  the number of shares of  Preferred  Stock (of whatever
series) authorized or Common Stock authorized for issuance;

          (iii) merge or consolidate  with or into any other company,  person or
entity,  unless  holders  of each  share of  Series A  Preferred  Stock  receive
consideration  in an amount  equal to at least the greater of (A) the product of
(x) the number of shares of Common  Stock  into  which  such  shares of Series A
Preferred Stock is then convertible and (y) the  consideration to be received by
holders of each share of Common Stock  pursuant to such merger or  consolidation
and (B) the  Liquidation  Preference,  of such share of Series A Preferred Stock
plus all accumulated but unpaid dividends thereon (whether or not declared);

          (iv) amend,  modify or repeal the powers,  preferences or rights of or
the  restrictions  provided for the benefit of holders of the Series A Preferred
Stock or the Common  Stock if such  action  would  affect the Series A Preferred
Stock or the Common Stock adversely;

          (v)  sell or  otherwise  dispose  of all or  substantially  all of the
assets of the  Corporation  in any  single  transaction  or  series  of  related
transactions  unless  the  holders  of each  share of Series A  Preferred  Stock
receive consideration in an amount equal to at least the Liquidation  Preference
of such  share of Series A  Preferred  Stock  plus all  accumulated  but  unpaid
dividends thereon (whether or not declared);

          (vi)  declare or pay any  dividend on shares of Common  Stock or other
equity  securities of the  Corporation  ranking  junior to the Parity  Preferred
Stock  (excluding  dividends  payable  solely in shares of Common Stock or other
equity  securities of the  Corporation  ranking  junior to the Parity  Preferred
Stock);

          (vii)   authorize  or  enter  into  any   transaction   or  series  of
transactions  (excluding  transactions  authorized  by  the  Corporation  or its
subsidiaries prior to the Series C Preferred Stock Issue Date and any amendments
thereto  that do not alter the  economic  value of such  transactions)  with any
director  or  executive  officer of the  Corporation  or any Person  directly or
indirectly  controlling the  Corporation (or any affiliate  thereof other than a
subsidiary  of the  Corporation)  if  the  aggregate  amount  involved  in  such

<PAGE>
                                                                              11


transaction  or  series  of  transactions  involves  the  payment  by or to  the
Corporation or its  subsidiaries of more than $100,000 in any one fiscal year of
the Corporation; or

          (viii) issue Common Stock or Convertible  Securities as  consideration
for  assets  comprising  a business  that is not  within  the lines of  business
conducted  by  the  Corporation  or  any  of  its  subsidiaries  (or  operations
reasonably ancillary thereto) on the Series C Preferred Stock Issue Date.

          (d) Without  the  consent of each  holder of Series A Preferred  Stock
affected thereby, the Corporation shall not reduce the Liquidation Preference of
the Series A Preferred Stock or the rate at which dividends  accumulate thereon,
or modify the dividend cumulation  provisions of the Series A Preferred Stock or
the times and prices at which the Series A Preferred  Stock may be redeemed in a
manner that would be adverse to the holders of Series A Preferred Stock.

          7.  REISSUANCE  OF  SERIES  A  PREFERRED  STOCK.  Shares  of  Series A
Preferred  Stock that have been issued and  reacquired  in any manner  including
shares  purchased or redeemed or exchanged or converted,  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 (other
than Series A Preferred Stock).

          8. BUSINESS DAY. If any payment or conversion shall be required by the
terms  hereof to be made on a day that is not a Business  Day,  such  payment or
conversion shall be made on the immediately succeeding Business Day.

          9.  DEFINITIONS.  As used  in this  Certificate  of  Designation,  the
following  terms shall have the  following  meanings  (with terms defined in the
singular  having  comparable  meanings  when used in the plural and vice versa),
unless the context otherwise requires:

          "1997 Stock Option Plan" shall mean the 1997 Stock Purchase and Option
Plan for Key Employees of KMC Telecom Holdings, Inc. and affiliates, as the same
may be amended from time to time.

          "Board of  Directors"  shall have the  meaning  ascribed  to it in the
first paragraph of this Resolution.

          "Business Day" means any day except a Saturday, a Sunday, or other day
on which  commercial banks in the State of New York or New Jersey are authorized
or required by law or executive order to close.

          "Capital Stock" means, with respect to any Person, any and all shares,
interests,  participations,  rights in, or other equivalents (however designated
and whether voting or non-voting) of, such Person's capital stock (but excluding
any debt  security that is  exchangeable  for or  convertible  into such capital
stock).

          "Conunon  Stock"  shall have the  meaning  ascribed to it in Section 2
hereof.


<PAGE>
                                                                              12


          "Convertible  Securities"  shall mean any  evidences of  indebtedness,
shares or securities convertible into or exchangeable for Common Stock.

          "Corporation"  shall  have the  meaning  ascribed  to it in the  first
paragraph of this Resolution.

          "Dividend  Payment  Date" means March 31,  June 30,  September  30 and
December 31 of each year.

          "Dividend  Period" means the Initial Dividend Period and,  thereafter,
each Quarterly Dividend Period.

          "Fair Market Value" per share of Common Stock as of a particular  date
(the  "Determination  Date")  shall mean:  (i) if the Common  Stock is listed or
admitted  for trading on a national  securities  exchange,  then the Fair Market
Value  shall be the  average of the last 30 "daily  sales  prices" of the Common
Stock on the principal national securities exchange on which the Common Stock is
listed  or  admitted  for  trading  on the last 30  Business  Days  prior to the
Determination  Date, or if not listed or traded on any such  exchange,  then the
Fair Market  Value shall be the average of the last 30 "daily  sales  prices" of
the Common  Stock on the Nasdaq  National  Market on the last 30  Business  Days
prior to the  Determination  Date (the "daily  sales price" shall be the closing
price for bona fide transactions of the Common Stock at the end of each day); or
(ii) if the  Common  Stock is not so  listed or  admitted  to  unlisted  trading
privileges or if no such sale is made on at least 25 of such days, then the Fair
Market Value shall be as  reasonably  determined  in good faith by the Company's
Board of  Directors  or a duly  appointed  committee  of the Board of  Directors
(which  determination  shall  be  reasonably  described  in the  written  notice
delivered,  and shall be reasonably  acceptable,  to the holders of the Series A
Preferred Stock).

          "Fully  Diluted"  shall  mean at any date as of which  the  number  of
shares  of  Common  Stock  is to be  determined,  all  shares  of  Common  Stock
outstanding  at such date and the  maximum  number  of  shares  of Common  Stock
issuable in respect of Convertible  Securities  and warrants,  options and other
rights  to  purchase   (directly  or  indirectly)  shares  of  Common  Stock  or
Convertible  Securities (giving effect to the then current respective conversion
prices) outstanding on such date (to the extent the rights to convert,  exchange
or exercise thereunder are presently exercisable).

          "High Yield Debt and Equity  Offering" shall have the meaning ascribed
to it in Section 5 hereof.

          "Initial Dividend Period" means the dividend period commencing on, and
including,  the  Series A  Prefer-red  Stock  Issue  Date  and  ending  on,  and
excluding, the first Dividend Payment Date to occur thereafter.

          "Junior  Stock"  shall have the  meaning  ascribed  to it in Section 2
hereof.


<PAGE>
                                                                              13


          "Liquidation  Preference"  shall have the  meaning  ascribed  to it in
Section 1 hereof.

          "Option"  shall mean rights,  options,  or warrants to  subscribe  for
purchase or otherwise acquire Convertible Securities or Common Stock.

          "Parity Preferred Stock" means,  collectively,  the Series A Preferred
Stock, the Series B Cumulative  Convertible  Preferred Stock, par value $.01 per
share, the Corporation's  Series C Cumulative  Convertible  Preferred Stock, par
value  $.0l  per  share,  the  Corporation's  Series  D  Cumulative  Convertible
Preferred  Stock,  par value  $.0l per share and any other  series of  preferred
stock  which is  determined  to be  "Parity  Preferred  Stock"  by the  Board of
Directors.

          "Person" means any individual, firm, corporation, partnership, limited
liability  company,  trust,  incorporated or unincorporated  association,  joint
venture, joint stock company, governmental body or other entity of any kind.

          "Qualified  Public  Offering"  shall mean the first  offer for sale of
Common  Stock  pursuant  to an  effective  registration  statement  filed by the
Corporation  under  the  Securities  Act of  1933,  as  amended,  in  which  the
Corporation  receives aggregate gross proceeds (before deduction of underwriting
discounts and expenses of sale) of at least  $40,000,000;  provided that the per
share price at which such shares are sold in the offering  (before  deduction of
underwriting  discounts  and  expenses  of sale) is at least  four (4) times the
Conversion Price then in effect.

          "Quarterly"  shall  mean the  quarterly  periods  commencing  on,  and
including,  each Dividend  Payment Date and ending on, and excluding,  each next
Dividend Payment Date occurring immediately thereafter, respectively.

          "Realization  Event" shall mean the  occurrence of (i) the sale of all
or  substantially   all  of  the  stock  or  assets  of  the  Corporation,   the
consolidation or merger of the Corporation  with one or more other  corporations
or (ii) the closing of an initial  public  offering of Common Stock in which the
Corporation  receives aggregate gross proceeds (before deduction of underwriting
discounts and expenses of sale) of at least $40,000,000.

          "Senior Preferred Stock" means,  collectively,  the Series E Preferred
Stock,  and the Series F Preferred Stock and any other series of preferred stock
which is determined to be "Senior  Preferred  Stock" by the Directors,  PROVIDED
that,  no Capital  Stock shall be  designated as such without the consent of the
holders of a majority of the shares of Series A Preferred Stock.

          "Series A Preferred  Stock"  shall have the meaning  ascribed to it in
Section 1 hereof.

          "Series A  Preferred  Stock  Issue Date" means the first date on which
the Series A Preferred Stock is issued by the Corporation.

          "Series C Preferred Stock" means the Corporation's Series C Cumulative
Convertible Preferred Stock, par value $.01 per share.


<PAGE>
                                                                              14


          "Series D Preferred Stock" means the Corporation's Series D Cumulative
Convertible Preferred Stock, par value, $.01 per share.

          "Series  E  Preferred  Stock"  means the  Series E Senior  Redeemable,
Exchangeable, PIK Preferred Stock.

          "Series  F  Preferred  Stock"  means the  Series F Senior  Redeemable,
Exchangeable, PIK Preferred Stock.

          "Shareholders  Agreement" means the Amended and Restated  Stockholders
Agreement among KMC Telecom  Holdings,  Inc.,  Nassau Capital Partners L.P., NAS
Partners I L.L.C.,  Harold N. Kamine, KMC  Telecommunications  L.P., AT&T Credit
Corporation,  General  Electric Capital  Corporation,  Corestates Bank, N.A. and
Corestates Holdings, Inc., dated as of October 31, 1997, as amended by Amendment
No.1,  dated as of January 7, 1998,  to the  Amended and  Restated  Stockholders
Agreement,  dated as of October 31, 1997,  Amendment  No. 2, dated as of January
26,  1998,  to the  Amended and  Restated  Stockholders  Agreement,  dated as of
October 31, 1997, Amendment No. 3, dated as of February 25, 1998, to the Amended
and Restated Stockholders Agreement, dated as of October 31, 1997, Amendment No.
4, dated as of  February  4, 1999,  to the  Amended  and  Restated  Stockholders
Agreement,  dated as of October 31, 1997, Amendment No. 5, dated as of April 30,
1999, to the Amended and Restated  Stockholders  Agreement,  dated as of October
31, 1997.






<PAGE>
                                                                              15


          IN WITNESS  WHEREOF,  KMC  TELECOM  HOLDINGS,  INC.  has  caused  this
certificate to be duly executed by its Chief Financial  Officer this 30th day of
April, 1999.


                                           KMC TELECOM HOLDINGS, INC



                                           By:      /S/ James D. Grenfell
                                                --------------------------------
                                                Name:   James D. Grenfell
                                                Title:  Chief Financial Officer