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                                                                     EXHIBIT 4.1

                            MGC COMMUNICATIONS, INC.

                      SERIES B CONVERTIBLE PREFERRED STOCK
                           CERTIFICATE OF DESIGNATION

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                 Pursuant to Sections 78.195 and 78.1955 of the
                 General Corporation Law of the State of Nevada

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      MGC Communications, Inc. (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Nevada, does hereby
certify that pursuant to the authority vested in the Board of Directors of the
Corporation by its Articles of Incorporation, as amended, and pursuant to the
provisions of Sections 78.195 and 78.1955 of the General Corporation Law of the
State of Nevada, said Board of Directors, by unanimous written consent or at a
meeting duly called and held, adopted the following resolution which remains in
full force and effect as of the date hereof:

      RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation (the "Board of Directors") by its Articles of Incorporation,
as amended (hereinafter referred to as the "Articles of Incorporation"), the
Board of Directors does hereby create, authorize and provide for the issuance of
Series B Convertible Preferred Stock, par value $.001 per share, consisting of
5,278,000 shares, having the following designations, preferences and relative
and other special rights, qualifications, limitations and restrictions:

      1. Designation. The designation of such series is "Series B Convertible
Preferred Stock" (hereinafter in this Certificate of Designation called the
"Series B Preferred") and the number of shares constituting such series shall be
5,278,000, which number may be decreased (but not increased) by the Board of
Directors without a vote of stockholders; provided, however, that such number
may not be decreased below the number of then currently outstanding shares of
Series B Preferred, plus shares issuable upon the exercise of any then
outstanding options, warrants or rights to acquire Series B Preferred. All
capitalized terms used in this Certificate of Designation and not otherwise
defined shall have the meaning given to such terms in Section 12 hereof.


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      2.    Dividend Rights.

            (a) Holders of Series B Preferred, prior to and in preference to the
holders of Junior Securities, will be entitled to receive, out of funds legally
available for such purpose, cumulative dividends as provided in this Section 2.
Dividends on each share of Series B Preferred shall accrue at the rate of 10%
per annum on the sum of (i) the Series B Liquidation Value and (ii) all accrued
and unpaid dividends on such share of Series B Preferred from the date of
issuance. Such dividends will be calculated and compounded annually on December
31 of each year (each a "dividend date") in respect of the prior twelve month
period (the initial such calculation to be made at the same rate for the number
of days elapsed from the date of issue of Series B Preferred to and including
the 31st day of December, 1999). Such dividends shall commence to accrue on each
share of Series B Preferred from the date of issuance thereof whether or not
declared by the Board of Directors, and whether or not there are profits,
surplus or other funds of the Corporation legally available for the payment of
dividends, and shall continue to accrue thereon until the earlier of (x) the
date the Series B Liquidation Value of such share (plus all accrued and unpaid
dividends thereon) is paid in full and (y) a proper election of the Board of
Directors pursuant to Section 2(b) below. For purposes of determining the amount
of dividends accrued on the Series B Preferred pursuant to this Section 2(a) in
connection with the sale, conversion, redemption or repurchase of any Series B
Preferred which may occur between two dividend dates, the applicable dividend
rate for such period shall be multiplied by a fraction, the numerator of which
is the actual number of days elapsed in the then current annual period and the
denominator of which is the total number of days comprising such annual period.
Except as otherwise provided herein, if at any time the Corporation pays less
than the total amount of dividends then accrued with respect to the Series B
Preferred Stock, such payment shall be distributed ratably among the holders of
Series B Preferred Stock based upon the aggregate accrued but unpaid dividends
on the Series B Preferred Stock held by each holder.

            (b) At any time commencing 201 days after the Original Issue Date,
upon the written election of the Board of Directors, written notice of which
shall be sent to each holder of Series B Preferred within two (2) business days
after the date of such election, dividends will no longer accrue on the Series B
Preferred (but those dividends which had accumulated to the date of such
election will be preserved) if the average closing sales price of the Common
Stock on the Nasdaq Stock Market or the New York Stock Exchange for the twenty
(20) trading days immediately preceding the Corporation's written election has
exceeded the amount which equals 3.0 times the Series B Liquidation Value (the
"Market Threshold"). In the written notice provided to the holders of Series B
Preferred pursuant to the foregoing sentence, the Board shall certify its
calculation of the Market Threshold, and provide each holder with such
supporting documentation as such holder may reasonably request.


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      3.    Voting Rights.

            (a) Voting Generally. Except as otherwise required by law or as
provided in this Section 3, the Series B Preferred will vote together with the
Common Stock, and not as a separate class, at any annual or special meeting of
stockholders, and may act by written consent in the same manner as the Common
Stock. In either case, each holder of shares of Series B Preferred will be
entitled to such number of votes as will be equal to the number of whole shares
of Common Stock into which such holder's aggregate number of shares of Series B
Preferred are convertible pursuant to Section 5 hereof (assuming only for
purposes of this calculation that accrued and unpaid dividends on such shares
are not subject to conversion) immediately after the close of business on the
record date fixed for such meeting or the effective date of such written
consent.

            (b) Separate Vote of Series B Preferred. So long as (i) not less
than one-third of the number of shares of Series B Preferred initially issued
remain outstanding or (ii) the number of shares of Series B Preferred
outstanding represents not less than five percent (5%) of the outstanding Common
Stock, assuming conversion of all outstanding shares of Series B Preferred, the
vote or written consent of a Majority of the Series B Holders shall be necessary
for effecting or validating the following actions (each a "Restricted Action"):

            (i) increase or decrease (other than by redemption or conversion)
      the total number of authorized shares of, or issue any series of,
      Preferred Stock which is senior in respect of dividends, liquidation or
      otherwise to or on a pari passu basis with the Series B Preferred;

            (ii) permit the Corporation or any Subsidiary to sell, convey or
      otherwise dispose of assets having a value in excess of $5,000,000; or
      merge into or consolidate with any other Person (other than the
      Corporation or a Subsidiary); or effect a Sale of the Company;

            (iii) voluntarily liquidate, dissolve or wind up the Corporation;

            (iv) alter or change the rights, preferences or privileges of the
      shares of Series B Preferred so as to affect adversely such shares;

            (v) declare or pay any dividends or make other distribution on any
      Junior Securities except for the repurchase of any Common Stock subject to
      a repurchase right for terminated employees or independent contractors;

            (vi) permit the Corporation or any Subsidiary to enter into any
      transaction or series of related transactions with any Affiliate of the
      Corporation, other than those directly related to (1) pay or benefits
      (including stock options) provided to Affiliates who are employees or
      Directors in accordance with existing agreements or past 


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      practices or approved with Required Board Approval; (2) the lease of
      additional office space in the Las Vegas metropolitan area on terms
      consistent with the existing leases to which the Corporation is a party,
      and as approved by the Required Board Approval; or (3) any other
      arms-length, commercially reasonable transactions approved by the
      disinterested Directors in an amount not to exceed $100,000 in any year;

            (vii) permit the Corporation or any Subsidiary to acquire the assets
      or securities of any Person except for acquisitions involving cash,
      securities or other property with an aggregate Fair Market Value of less
      than (x) $10 million for any single acquisition and (y) $20 million in the
      aggregate for all such acquisitions during any 12-month period;

            (viii) permit the Corporation or any Subsidiary to incur additional
      Indebtedness (other than Indebtedness incurred as a result of the
      refinancing of existing Indebtedness, provided the total outstanding
      Indebtedness does not increase as a result of such refinancing) in excess
      of (x) an aggregate at any one time outstanding for the Corporation and
      its Subsidiaries of up to $100,000,000 during the 12 months after the
      Original Issue Date, and (y) thereafter any Indebtedness in addition to
      the highest amount outstanding during the 12 months after the Original
      Issue Date of an aggregate at any one time outstanding in excess of
      $20,000,000 for the Corporation and its Subsidiaries, provided that for
      the purposes of this Section 3(b)(viii), Indebtedness shall not be deemed
      to include purchase money financing for capital expenditures in a budget
      approved by the Required Board Approval;

            (ix) make any material changes to the Corporation's then current
      business plan;

            (x) hire a chief executive officer of the Corporation;

            (xi) organize any new direct or indirect Subsidiaries of the
      Corporation other than wholly-owned Subsidiaries or any joint ventures
      between the Corporation and a third party that involve the diversion of
      assets or business of the Corporation to the joint venture entity, amend
      or modify any such joint venture or partnership agreement to which the
      Corporation or any Subsidiary is a party or restructure any Subsidiary,
      partnership or such joint venture involving the Corporation or any
      Subsidiary; or

            (xii) issue Additional Shares of Common Stock (or issue other rights
      that, pursuant to Section 5(k), are deemed to constitute Additional Shares
      of Common Stock) to the extent that as a result of such issuance (or
      deemed issuance) the Series B Conversion Price would be reduced to a price
      less than the Series B Liquidation Value.

            (c) The holders of the requisite percentage of Series B Preferred
shall either approve or reject a Restricted Action described in Section
3(b)(vii)-(xii) (a "Special Restricted


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Action") within twenty (20) business days of receipt by the holders of Series B
Preferred of written notice and a reasonably detailed description of the
proposed Restricted Action; provided that the failure of the holders of Series B
Preferred to approve or reject the Special Restricted Action within such time
period shall not be deemed to be an approval thereof.

            (d) In the event the Series B Holders shall reject a Special
Restricted Action, the Corporation shall have the right, at the written election
of the Board, notice of which (the "Company Redemption Notice") shall be
promptly sent to the Series B Holders, to initiate an Optional Redemption, which
will be subject to the terms and conditions contained in Section 6. In the
Company Redemption Notice, the Corporation shall specify the Optional Redemption
Date for purposes of Section 6, which Optional Redemption Date shall not be more
than sixty (60) days from the date of the Company Redemption Notice. Within ten
(10) business days of the receipt of the Company Redemption Notice by the Series
B Holders, a Majority of the Series B Holders shall either (i) acknowledge and
agree in writing to the Optional Redemption or (ii) approve the Special
Restricted Action that is the subject of the Optional Redemption, in which event
the Optional Redemption shall be terminated. In the event the Special Restricted
Action is rejected by the Series B Holders but such Special Restricted Action is
not effected by the Corporation within ninety (90) days of the delivery of the
Company Redemption Notice, and the Optional Redemption has not yet been
consummated, a Majority of the Series B Holders may elect in writing to void the
Optional Redemption and return to the status quo ante.

            (e) In the event the Corporation takes any Restricted Action without
obtaining the approval of the holders of the Series B Preferred as required by
Section 3(b) (an "Event of Non-Compliance") and a Majority of the Series B
Holders gives written notice to the Board of Directors of the Corporation of
such an Event of Non-Compliance, the Corporation shall then have thirty (30)
days to take such action as is necessary to cure such default to the
satisfaction of a Majority of the Series B Holders. If the Corporation is unable
to cure the Event of Non-Compliance, a Majority of the Series B Holders may then
elect to initiate a Sale of the Company by submitting written notice of that
election to the Board of Directors of the Corporation (a "Sale Notice"). The
Board of Directors will then have an obligation to use its best efforts to
effect a Sale of the Company; provided that within twenty (20) business days of
its receipt of a Sale Notice electing a Sale of the Company, the Board may elect
to initiate an Optional Redemption pursuant to and subject to the terms and
conditions of Section 6 hereof in lieu of a Sale of the Company by providing a
Company Redemption Notice to the Series B Holders. In the Company Redemption
Notice, the Corporation shall specify the Optional Redemption Date for purposes
of Section 6, which Optional Redemption Date shall not be more than sixty (60)
days from the date of the Company Redemption Notice.

            (f) In the event a Sale of the Company has not been consummated
within six (6) months of a Sale Notice electing a Sale of the Company (and the
Corporation had not elected to initiate an Optional Redemption in lieu of a Sale
of the Company within the time period set forth in Section 3(e)), the Series B
Holders, voting as a separate class, will then have the right to elect that
number of the directors of the Corporation as shall constitute a majority of the
total 


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number of directors of the Corporation as shall from time to time constitute the
Board. A special meeting of the stockholders shall be called by the Corporation
from time to time at the written instruction of a Majority of the Series B
Holders for the purpose of electing such directors.

      4.    Liquidation Rights. Upon any liquidation, dissolution or winding up
of the Corporation, voluntary or involuntary:

            (a) The holders of Series B Preferred will be entitled to receive,
prior and in preference to any distribution of any of the assets or surplus
funds of the Corporation to the holders of the Junior Securities by reason of
their ownership thereof, but subsequent to the repurchase or payment in full or
other satisfaction of the Senior Secured Notes, (i) an amount in cash equal to,
or (ii) Freely Tradeable Securities with a Fair Market Value equal to, or (iii)
in a transaction to which paragraph (f) applies, assets with a Fair Market Value
equal to the greater of (A) the Series B Liquidation Value plus accrued but
unpaid dividends on each share of Series B Preferred then held by such holder or
(B) the amount such holder would have received in such liquidation, dissolution,
winding up, merger or Sale of the Company if each share of Series B Preferred
had been converted to Common Stock pursuant to Section 5 immediately prior to
such event; provided, however, that all or a portion of accrued but unpaid
dividends shall be extinguished and shall not be payable upon any liquidation,
dissolution or winding up if, and to the extent that, (i) such liquidation,
dissolution or winding up occurs on or before the third anniversary of the
Original Issue Date, and (ii) the payment of dividends would result in each
holder of Series B Preferred receiving cash and/or Freely Tradeable Securities
with a Fair Market Value in an amount that exceeds on a per share basis 2.5
times the Series B Liquidation Value (a "Qualified Return"). If the assets of
the Corporation are insufficient to make payment in full to all holders of
Series B Preferred, then such assets will be distributed among the holders of
Series B Preferred at the time outstanding, ratably in proportion to the full
amount to which they would otherwise be respectively entitled.

            (b) At the written election of the holders of a Majority of the
Series B Preferred, a Sale of the Company shall be deemed to be a liquidation,
dissolution or winding up of the Corporation, as those terms are used in this
Section 4. In the event a Majority of the Series B Holders elect to treat such
Sale of the Company as a liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series B Preferred shall have the right to
preference upon the distribution of assets or the proceeds to be received as
provided in this Section 4.

            (c) After setting apart or paying in full the preferential amounts
due pursuant to subparagraph (a) of this Section 4, the remaining assets of the
Corporation available for distribution to shareholders, if any, shall be
distributed to the other stockholders of the Corporation as their respective
interests may appear.

            (d) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Corporation shall, within ten
(10) days after the date the 


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Board of Directors approves such action, or twenty (20) days prior to any
shareholders' meeting called to approve such action, or twenty (20) days after
the commencement of an involuntary proceeding, whichever is earlier, give each
holder of shares of Series B Preferred initial written notice of the proposed
action, including a description of the stock, cash and property to be received
by the holders of shares of Series B Preferred upon consummation of the proposed
action and the date of delivery thereof.

            (e) The Corporation shall not consummate any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation before the
expiration of thirty (30) days after the mailing of the initial notice or ten
(10) days after the mailing of any subsequent written notice, whichever is
later.

            (f) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation (other than a deemed liquidation
upon a Sale of the Company pursuant to Section 4(b)) which will involve the
distribution of assets other than cash, the Corporation shall promptly determine
the Fair Market Value of the assets to be distributed to the holders of shares
of Series B Preferred and the holders of shares of Common Stock.

      5.    Conversion Rights.

            The holders of the Series B Preferred will have the following rights
with respect to the conversion of the Series B Preferred into shares of Common
Stock:

            (a) Optional Conversion. Subject to and in compliance with the
provisions of this Section 5, any shares of Series B Preferred may, at the
option of the holder, be converted at any time into fully-paid and nonassessable
shares of Common Stock (an "Optional Conversion"). The number of shares of
Common Stock to which a holder of Series B Preferred will be entitled upon
conversion will be the product obtained by multiplying the "Series B Conversion
Rate" then in effect (determined as provided in Section 5(c)), by the number of
shares of Series B Preferred being converted.

            (b) Mandatory Conversion.

                (1) At any time commencing on the earlier of (i) the date that
      is 386 days after the Original Issue Date, or (ii) the date on which the
      Series B Holders exercise demand registration rights under that certain
      Registration Rights Agreement dated the Original Issue Date, upon the
      written election of the Board of Directors of the Corporation, each share
      of Series B Preferred shall be automatically converted into shares of
      Common Stock at the then-effective Series B Conversion Rate if the Market
      Threshold has been achieved, provided the Board makes this election and
      provides written notice of its election to the Series B Holders within 60
      days of the first day as of which the Market Threshold had been achieved
      (a "Mandatory Conversion"). In the written notice provided to the holders
      of Series B Preferred pursuant to the foregoing sentence, the Board shall


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      certify its calculation of the Market Threshold, and provide each holder
      with such supporting documentation as such holder may reasonably request.

                  (2) Upon the occurrence of the events specified in paragraph
      (1) above, the outstanding shares of Series B Preferred will be converted
      automatically without any further action by the holders of such shares and
      whether or not the certificates representing such shares are surrendered
      to the Corporation or its transfer agent; provided, however, that the
      Corporation will not be obligated to issue certificates evidencing the
      shares of Common Stock issuable upon such conversion unless the
      certificates evidencing such shares of Series B Preferred are either
      delivered to the Corporation or its transfer agent as provided in Section
      5(e) below.

            (c) Conversion Rate. The conversion rate in effect at any time for
conversion of the Series B Preferred (the "Series B Conversion Rate") will be
the quotient obtained by dividing Nine Dollars ($9.00) by the "Series B
Conversion Price," calculated as provide in Section 5(d).

            (d) Series B Conversion Price. (i) The conversion price for the
Series B Preferred will initially be Nine Dollars ($9.00) (the "Series B
Conversion Price"). Such initial Series B Conversion Price will be adjusted from
time to time in accordance with this Section 5. All references to the Series B
Conversion Price herein will mean the Series B Conversion Price, as so adjusted.

            (e) Mechanics of Conversion. Each holder of Series B Preferred who
desires to convert the same into shares of Common Stock pursuant to this Section
5 will surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or any transfer agent for the Series B Preferred and
will give written notice to the Corporation at such office that such holder
elects to convert the same. Such notice will state the number of shares of
Series B Preferred being converted. Thereupon, the Corporation will promptly
issue and deliver at such office to such holder a certificate or certificates
for the number of shares of Common Stock which equals the number of shares of
Common Stock to which such holder is entitled under the then-effective Series B
Conversion Rate. In addition, upon any such conversion the holder of the shares
of Series B Preferred being converted shall be issued that number of shares of
Common Stock as is equal to the greater of (i) the number of shares of Common
Stock whose Fair Market Value equals the amount of all accrued but unpaid
dividends on the shares of Series B Preferred being converted and (ii) the
number of shares of Common Stock obtained by dividing the aggregate amount of
accrued but unpaid dividends on the shares of Series B Preferred being converted
by the Series B Conversion Price then in effect; provided, however, that (A) all
of the accrued but unpaid dividends shall be extinguished and shall not be
payable with respect to shares of Series B Preferred in the event such shares
are being converted on or before the third anniversary of the Original Issue
Date pursuant to (x) a Mandatory Conversion or (y) an Optional Conversion within
60 days of the first day as of which the Market Threshold had been achieved; and
(B) the accrued but unpaid dividends shall be extinguished and shall not be
payable in an 


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Optional Conversion that takes place on or before the third anniversary of the
Original Issue Date as part of a Sale of the Company if, and to the extent that,
the payment of dividends would result in each holder receiving an amount of cash
and/or Freely Tradeable Securities with a Fair Market Value that exceeds a
Qualified Return. In addition, the Corporation shall promptly deliver to the
holder of Series B Preferred being converted a certificate representing those
shares of Series B Preferred, if any, that were not converted. Such conversion
will be deemed to have been made at the close of business on the date of such
surrender of the certificates representing the shares of Series B Preferred to
be converted, and the Person entitled to receive the shares of Common Stock
issuable upon such conversion will be treated for all purposes as the record
holder of such shares of Common Stock on such date.

            (f) Adjustment for Stock Splits and Combinations. If the Corporation
at any time or from time after the date that the Original Issue Date effects a
subdivision of the outstanding Common Stock, the Series B Conversion Price, in
effect immediately before that subdivision will be proportionately decreased.
Conversely, if the Corporation at any time or from time to time after the
Original Issue Date combines the outstanding shares of Common Stock into a
smaller number of shares, the Series B Conversion Price in effect immediately
before the combination will be proportionately increased. Any adjustment under
this Section 5(f) will become effective at the close of business on the date the
subdivision or combination becomes effective.

            (g) Adjustment for Common Stock Dividends and Distributions. If the
Corporation at any time or from time to time after the Original Issue Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, in each such event the Series B Conversion Price that is
then in effect will be decreased as of the time of such issuance or, in the
event such record date is fixed, as of the close of business on such record
date, by multiplying the Series B Conversion Price then in effect by a fraction
(1) the numerator of which is the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (2) the denominator of which is the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Series B Conversion Price will be recomputed accordingly as
of the close of business on such record date and thereafter the Series B
Conversion Price will be adjusted pursuant to this Section 5(g) to reflect the
actual payment of such dividend or distribution.

            (h) Adjustments for Other Dividends and Distributions. If the
Corporation at any time or from time to time after the Original Issue Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Corporation other than shares of Common Stock, in each such event 


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provision will be made so that the holders of the Series B Preferred will
receive upon conversion thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of the other securities of the
Corporation which they would have received had their Series B Preferred been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period, subject to all other adjustments called for during such period under
this Section 5 with respect to the rights of the holders of the Series B
Preferred or with respect to such other securities by their terms.

            (i) Adjustment for Reclassification, Exchange and Substitution. If
at any time or from time to time after the Original Issue Date the Common Stock
issuable upon the conversion of the Series B Preferred is changed into the same
or a different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 5), in
any such event each holder of Series B Preferred will have the right thereafter
to convert such stock into the kind and amount of stock and other securities and
property receivable upon such recapitalization, reclassification or the change
by holders of the maximum number of shares of Common Stock into which such
shares of Series B Preferred could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the
terms thereof.

            (j) Reorganizations, Mergers, Consolidations or Sales of Assets. If
at any time or from time to time after the Original Issue Date there is a
merger, consolidation, recapitalization, reclassification, sale of all or
substantially all of the Corporation's assets or reorganization involving the
Common Stock (collectively, a "capital reorganization") (other than a Sale of
the Company provided for in Section 4(b) or a merger, consolidation, sale of
assets, recapitalization, subdivision, combination, reclassification, exchange
or substitution of shares provided for elsewhere in this Section 5), as a part
of such capital reorganization, provision will be made so that the holders of
the Series B Preferred will thereafter be entitled to receive upon conversion of
the Series B Preferred the number of shares of stock or other securities or
property of the Corporation to which a holder of the number of shares of Common
Stock deliverable upon conversion would have been entitled on such capital
reorganization, subject to adjustment in respect of such stock or securities by
the terms thereof. In any such case, appropriate adjustment will be made in the
application of the provisions of this Section 5 with respect to the rights of
the holders of Series B Preferred after the capital reorganization to the end
that the provisions of this Section 5 (including adjustment of the Series B
Conversion Price then in effect and the number of shares issuable upon
conversion of the Series B Preferred) will be applicable after that event and be
as nearly equivalent as practicable.


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            (k) Sale of Shares Below Series B Conversion Price.

                (1) If at any time or from time to time after the Original
      Issue Date, the Corporation issues or sells, or is deemed by the
      provisions of this Section 5(k) to have issued or sold, Additional Shares
      of Common Stock (as hereinafter defined), other than as a dividend or
      other distribution on any class of stock as provided in Section 5(g)
      above, and other than a subdivision or combination of shares of Common
      Stock as provided in Section 5(f) above for an Effective Price (as
      hereinafter defined) less than the then effective Series B Conversion
      Price, then and in each such case the then existing Series B Conversion
      Price will be reduced, as of the opening of business on the date of such
      issue or sale, to a price (but in no event to a price less than the Series
      B Liquidation Value) determined by dividing (a) the sum of (1) the product
      derived by multiplying (i) the Series B Conversion Price in effect
      immediately prior to such issue or sale times (ii) the number of shares of
      Common Stock deemed outstanding (as defined below) immediately prior to
      such issue or sale, plus (2) the consideration, if any, received (or
      deemed received pursuant to subsection (k)(2)) by the Corporation upon
      such issue or sale, by (b) the number of shares of Common Stock deemed
      outstanding (as defined below) immediately after such issue or sale. For
      the purposes of the preceding sentence, the number of shares of Common
      Stock deemed to be outstanding as of a given date will be the sum of (a)
      the number of shares of Common Stock actually outstanding, (b) the number
      of shares of Common Stock into which the then outstanding Series B
      Preferred could be converted if fully converted on the day immediately
      preceding the given date, and (c) the number of shares of Common Stock
      that could be obtained through the exercise or conversion in full of all
      other rights, options, warrants and convertible securities on the day
      immediately preceding the given date, regardless of whether or not such
      securities are fully exercisable for or convertible into Common Stock at
      such time.

                (2) For the purpose of making any adjustment required under
      this Section 5(k), the consideration received by the Corporation for any
      issue or sale of securities will (a) to the extent it consists of cash, be
      computed at the net amount of cash received by the Corporation after
      deduction of any underwriting or similar commissions, compensation or
      concessions paid or allowed by the Corporation in connection with such
      issue or sale but without deduction of any expenses payable by the
      Corporation, (b) to the extent it consists of property other than cash, be
      computed at the Fair Market Value of that property, and (c) if Additional
      Shares of Common Stock, Convertible Securities (as hereinafter defined) or
      rights or options to purchase either Additional Shares of Common Stock or
      Convertible Securities are issued or sold together with other stock or
      securities or other assets of the Corporation for a consideration that
      covers both, be computed as the portion of the consideration so received
      that may be reasonably determined in good faith by the Board of Directors
      with Required Board Approval to be allocable to such Additional Shares of
      Common Stock, Convertible Securities or rights or options.


                                       11
<PAGE>   12

                  (3) For the purpose of the adjustment required under this
      Section 5(k), if the Corporation issues or sells any rights or options for
      the purchase of, or stock or other securities exchangeable for or
      convertible into, Additional Shares of Common Stock (such exchangeable or
      convertible stock or securities being herein referred to as "Convertible
      Securities") and if the Effective Price of such Additional Shares of
      Common Stock is less than the Series B Conversion Price in effect, the
      Corporation will be deemed to have issued at the time of the issuance of
      such rights or options or Convertible Securities the maximum number of
      Additional Shares of Common Stock issuable upon exercise or conversion or
      exchange thereof and to have received consideration for the issuance of
      such shares an amount equal to the total amount of consideration, if any,
      received by the Corporation for the issuance of such rights or options or
      Convertible Securities, plus, in the case of such rights or options, the
      minimum amounts of consideration, if any, payable to the Corporation upon
      the exercise of such rights or options, plus in the case of Convertible
      Securities, the minimum amounts of consideration, if any, payable to the
      Corporation (other than by cancellation of liabilities or obligations
      evidenced by such Convertible Securities) upon the conversion or exchange
      thereof; provided that if in the case of Convertible Securities the
      minimum amount of such consideration cannot be ascertained, but are a
      function of antidilution or similar protective clauses, the Corporation
      shall be deemed to have received the minimum amounts of consideration
      without references to such clauses; provided further that if the minimum
      amount of consideration payable to the Corporation upon the exercise or
      conversion of rights, options or Convertible Securities is reduced over
      time or on the occurrence or non-occurrence of specified events, including
      by reason of antidilution adjustments, the Effective Price will be
      recalculated using the figure to which such minimum amount of
      consideration is reduced; provided further that if the minimum amount of
      consideration payable to the Corporation upon the exercise or conversion
      of such rights, options or Convertible Securities is subsequently
      increased, the Effective Price will be again recalculated using the
      increased minimum amount of consideration payable to the Corporation upon
      the exercise or conversion of such rights, options or Convertible
      Securities. No further adjustment of the Series B Conversion Price, as
      adjusted in each case upon the issuance of such rights, options or
      Convertible Securities, will be made as a result of the actual issuance of
      Additional Shares of Common Stock on the exercise of any such rights or
      options or the exchange or conversion of any such Convertible Securities.
      If any such rights or options or the conversion privilege represented by
      any such Convertible Securities shall expire without having been
      exercised, the Series B Conversion Price, as adjusted upon the issuance of
      such rights, options or Convertible Securities, will be readjusted to the
      Series B Conversion Price that would have been in effect had an adjustment
      been made on the basis that the only Additional Shares of Common Stock so
      issued were the Additional Shares of Common Stock, if any, actually issued
      or sold on the exercise of such rights or options or upon such conversion
      and that such Additional Shares of Common Stock, if any, were issued or
      sold for the consideration, if any, actually received by the Corporation
      for the granting of all such rights or options, whether or not exercised,
      plus the consideration received for 


                                       12
<PAGE>   13

      issuing or selling the Convertible Securities actually converted, plus the
      consideration, if any, actually received by the Corporation (other than by
      cancellation of liabilities or obligations evidenced by such Convertible
      Securities) on the conversion of such Convertible Securities, provided
      that such readjustment shall not apply to prior conversions of Series B
      Preferred.

                  (4) "Additional Shares of Common Stock" means all shares of
      Common Stock issued by the Corporation or deemed to be issued pursuant to
      this Section 5(k) whether or not subsequently reacquired or retired by the
      Corporation other than (A) shares of Common Stock issued upon conversion
      of Series B Preferred, (B) options to purchase up to Two Million Six
      Hundred Forty Thousand (2,640,000) shares of Common Stock granted to
      employees, officers or directors of or consultants or advisors to the
      Corporation or any Subsidiary pursuant to the Stock Option Plan and the
      shares of Common Stock issuable upon exercise of such options, or such
      increased number of shares of Common Stock as has been approved by the
      Required Board Approval, and (C) Convertible Securities outstanding as of
      the Original Issue Date and the shares of Common Stock issuable upon
      exercise or conversion of such Convertible Securities. The "Effective
      Price" of Additional Shares of Common Stock means the quotient determined
      by dividing (i) the aggregate consideration received, or deemed to have
      been received by the Corporation under this Section 5(k), for the issuance
      of such Additional Shares of Common Stock, by (ii) the total number of
      Additional Shares of Common Stock issued or sold, or deemed to have been
      issued or sold, by the Corporation under this Section 5(k).

            (l) Accountants' Certificate of Adjustment. In each case of an
adjustment or readjustment of the Series B Conversion Price for the number of
shares of Common Stock or other securities issuable upon conversion of the
Series B Preferred, the Corporation, at its expense, will compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate showing such adjustment or readjustment, and will mail such
certificate, by first class mail, postage prepared, to each registered holder of
Series B Preferred at the holder's address as shown in the Corporation's books.
The certificate will set forth such adjustment or readjustment, showing in
detail the facts upon which such adjustment or readjustment is based, including
a statement of (1) the Series B Conversion Price at the time in effect, and (2)
the type and amount, if any, of other property that at the time would be
received upon conversion of the Series B Preferred.

            (m) Notices of Record Date. Upon (1) any taking by the Corporation
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or (2) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation with or into any other
Corporation, or any other Sale of the Company, or any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, the Corporation will
mail to each holder of Series B Preferred at least twenty 


                                       13
<PAGE>   14

(20) days prior to the record date specified therein a notice specifying (1) the
date on which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (2) the date on
which any such reorganization, reclassification, transfer, consolidation,
merger, Sale of the Company, dissolution, liquidation or winding up is expected
to become effective, and (3) the date, if any, that is to be fixed as to when
the holders of record of Common Stock (or other securities) will be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization, reclassification, transfer,
consolidation, merger, Sale of the Company, dissolution, liquidation or winding
up.

            (n) Fractional Shares. No fractional shares of Common Stock will be
issued upon conversion of Series B Preferred. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
Series B Preferred by a holder thereof will be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional shares. If, after the aforementioned aggregation, the conversion
would result in the issuance of any fractional share, the Corporation will, in
lieu of issuing any fractional share, pay cash equal to the product of such
fraction multiplied by the Common Stock's Fair Market Value on the date of
conversion.

            (o) Reservation of Stock Issuable Upon Conversion. The Corporation
will at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series B Preferred, such number of its shares of Common Stock
as will from time to time be sufficient to effect the conversion of all
outstanding shares of Series B Preferred. If at any time the number of
authorized but unissued shares of Common Stock is not sufficient to effect the
conversion of all then outstanding shares of Series B Preferred, the Corporation
will take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as will be sufficient for such purpose.

            (p) Notices. Any notice required by the provisions of this
Certificate of Designation to be given to the holders of shares of the Series B
Preferred will be deemed given upon the earlier of actual receipt or seventy-two
(72) hours after the same has been deposited in the United States mail, by
certified or registered mail, return receipt requested, postage prepaid, and
addressed to each holder of record at the address of such holder appearing on
the books of the Corporation.

            (q) Payment of Taxes. The Corporation will pay all taxes (other than
taxes based upon income) and other governmental charges that may be imposed with
respect to the issue or delivery of shares of Common Stock upon conversion of
shares of Series B Preferred excluding any tax or other charge imposed in
connection with any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of Series B Preferred
so converted were registered.


                                       14
<PAGE>   15

      6.    Optional Redemption.

            (a) At any time after the sixth anniversary of the Original Issue
Date, or upon a Sale of the Company (but in no event prior to the Corporation's
repurchase or payment or satisfaction in full of the Senior Secured Notes), a
Majority of the Series B Holders may require the Corporation to redeem all, but
not less than all, of the outstanding shares of Series B Preferred (an "Optional
Redemption") by notifying the Corporation in writing of their intent to exercise
the rights afforded by this Section 6(a) and specifying a date not less than 90
nor more than 120 days from the date of such notice on which the outstanding
shares of Series B Preferred shall be redeemed (the "Optional Redemption Date").
Upon receipt of such notice the Corporation shall promptly notify the remaining
holders of Series B Preferred of the Optional Redemption Date. The recipients of
such notice shall be required to participate in the Optional Redemption. The
Corporation shall redeem on the Optional Redemption Date all the shares of
Series B Preferred. Each share of Series B Preferred to be redeemed shall be
redeemed for (i) an amount in cash equal to, or (ii) Freely Tradeable Securities
with a Fair Market Value equal to, the greater of (A) the sum of the Series B
Liquidation Value and all accrued dividends (provided that all or a portion of
the accrued but unpaid dividends shall be extinguished and shall not be payable
if, and to the extent that (x) the redemption occurs on or before the third
anniversary of the Original Issue Date and (y) the payment of dividends would
result in each holder of Series B Preferred receiving in cash an amount that
exceeds a Qualified Return), and (B) the Fair Market Value of the Common Stock
into which the Series B Preferred is then convertible pursuant to Section 5
hereof (the "Optional Redemption Price").

            (b) In the event the Optional Redemption is occurring pursuant to
Section 3(d) or Section 3(e), each share of Series B Preferred to be redeemed
shall be redeemed for an amount in cash equal to, or Freely Tradeable Securities
with a Fair Market Value equal to, the greater of (i) the Optional Redemption
Price and (ii) the price per share set forth in the table below, based on the
year during which the redemption occurs (the year number being the time period
prior to an anniversary of the Original Issue Date) and calculated as a multiple
of the Series B Liquidation Value:

                        Year                   Price
                        ----                   -----

                         1                      2.5

                         2                      2.5

                         3                        3

                         4                      3.5

                         5                        4

                         6                      4.5

      Notwithstanding anything herein to the contrary, an Optional Redemption
pursuant to Section 3(d) or Section 3(e) shall not take place prior to the
Corporation's repurchase or payment or satisfaction in full of the Senior
Secured Notes, or the Corporation's compliance 


                                       15
<PAGE>   16

with, or its receipt of the requisite consent from the holders of the Senior
Secured Notes under, the Indenture.

            (c) If the funds of the Corporation legally available for redemption
of shares of Series B Preferred on an Optional Redemption Date are insufficient
to redeem the total number of outstanding shares of Series B Preferred entitled
to redemption, the holders of shares of Series B Preferred entitled to
redemption shall share ratably in any funds legally available for redemption of
such shares according to the respective amounts that would be payable with
respect to the full number of shares owned by them if all such outstanding
shares were redeemed in full. At any time thereafter when additional funds of
the Corporation are legally available for the redemption of such shares of
Series B Preferred, such funds will be used at the earliest permissible time, to
redeem the balance of such shares, or such portion thereof for which funds are
then legally available. The Corporation shall be obligated to use its best
efforts to take such actions as may be necessary (including, without limitation,
the issuance of additional equity securities, the revaluation or
recapitalization of the Corporation or the consummation of a Sale of the
Company) in order to permit the full and timely redemption of the shares of
Series B Preferred entitled to redemption.

            (d) If, for any reason, the Corporation fails to redeem all shares
of Series B Preferred entitled to redemption on an Optional Redemption Date, and
such failure continues for a period of six (6) months from the Optional
Redemption Date, then the Series B Holders, as a class, shall have the right to
elect that number of directors of the Corporation as shall constitute a majority
of the total number of directors of the Corporation as shall from time to time
constitute the Board. A special meeting of the stockholders shall be called by
the Corporation from time to time at the written instruction of a Majority of
the Series B Holders for the purpose of electing such directors.

            (e) Shares of Series B Preferred 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 General
Corporation Law of the State of Nevada) have the status of authorized but
unissued shares of Preferred Stock of the Corporation undesignated as to series
and may, subject to the requirements of Section 3(b), be designated or
redesignated and issued or reissued, as the case may, as part of any series of
Preferred Stock of the Corporation, other than as Series B Preferred.

      7. Exclusion of Other Rights. Except as may otherwise be required by law,
the shares of Series B Preferred shall not have any preferences or relative,
participating, optional or other special rights, other than those specifically
set forth in this Certificate of Designation. The shares of Series B Preferred
shall have no preemptive or subscription rights pursuant to this Certificate of
Designation.


                                       16
<PAGE>   17

      8. Rank. The Series B Preferred shall rank senior in right as to dividends
and upon liquidation, dissolution or winding up to all Junior Securities,
whenever issued.

      9. Identical Rights. Each share of the Series B Preferred shall have the
same relative rights and preferences as, and shall be identical in all respects
with, all other shares of the Series B Preferred.

      10. Certificates. So long as any shares of the Series B Preferred are
outstanding, there shall be set forth on the face or back of each stock
certificate issued by the Corporation a statement that the Corporation shall
furnish without charge to each shareholder who so requests, a full statement of
the designation and relative rights, preferences and limitations of each class
of stock or series thereof that the Corporation is authorized to issue and of
the authority of the Board of Directors to designate and fix the relative
rights, preferences and limitations of each series.

      11. Amendments. Any provision of these terms of the Series B Preferred
Stock may be amended, modified or waived if and only if a Majority of the Series
B Holders have consented in writing or by an affirmative vote to such amendment,
modification or waiver of any such provision of this Certificate of Designation.

      12. Definitions.

      "Additional Shares of Common Stock" shall have the meaning given such term
in Section 5(k)(4) of this Certificate of Designation.

      "Affiliate" or "Affiliates" shall mean with respect to any Person, any
other Person that would be considered to be an affiliate of such Person under
Rule 144(a) of the Rules of Regulations of the Securities and Exchange
Commission, as in effect on the date hereof, if the Corporation were issuing
securities.

      "Articles of Incorporation" shall have the meaning given such term on the
cover page of this Certificate of Designation.

      "Board" or "Board of Directors" means the Board of Directors of the
Corporation.

      "Company Redemption Notice" shall have the meaning given to such term in
Section 3(d) of this Certificate of Designation.

      "Convertible Securities" shall have the meaning given such term in Section
5(k)(3) of this Certificate of Designation.

      "Corporation" means MGC Communications, Inc., a Nevada corporation.


                                       17
<PAGE>   18

      "Common Stock" means the Corporation's Common Stock, $.001 par value.

      "Effective Price" shall have the meaning given such term in Section
5(k)(4) of this Certificate of Designation.

      "Event of Non-Compliance" shall have the meaning given such term in
Section 3(e) of this Certificate of Designation.

      "Fair Market Value" of the assets or shares of capital stock at issue
shall mean the price that would be paid by a willing buyer of all of the assets
or shares of capital stock of the Corporation, as applicable, in a sale process
designed to attract all possible participants and to maximize value in an arm's
length transaction, such price to include a control premium and to exclude any
minority, illiquidity or other discounts. The determination of Fair Market Value
shall be made by (i) the Board of Directors of the Corporation, or (ii) if at
the written election of a Majority of the Series B Holders after presentation of
the Board's determination of Fair Market Value, by a nationally recognized
investment banking firm mutually agreeable to the Corporation and a Majority of
the Series B Holders, provided, however, in the event a firm cannot be agreed
upon such amount shall be determined by a nationally recognized investment
banking firm selected by two other such firms, one selected by the Corporation
and the other by a Majority of the Series B Holders. The determination of Fair
Market Value by such investment banking firm shall be final and binding on the
parties. The fees and expenses of such firm shall be paid for by the
Corporation.

      "Freely Tradeable Securities" shall mean shares of a common stock of a
public company listed for trading on the New York Stock Exchange or Nasdaq
National Market that are free of any and all restrictions on sale, including
under Rule 144 or 145 under the Securities Act of 1933, as amended.

      "GAAP" shall mean generally accepted accounting principles applied on a
consistent basis.

      "Indebtedness" shall mean all obligations, contingent (to the extent
required to be reflected in financial statements prepared in accordance with
GAAP) and otherwise, which in accordance with GAAP should be classified on the
obligor's balance sheet as liabilities, including, without limitation, in any
event and whether or not so classified: (i) all debt and similar monetary
obligations, whether direct or indirect; (ii) all liabilities secured by any
mortgage, pledge, security interest, lien, charge or other encumbrance existing
on property owned or acquired subject thereto, whether or not the liability
secured thereby shall have been assumed; (iii) all guarantees, endorsements and
other contingent obligations whether direct or indirect in respect of
Indebtedness or performance of others, including any obligation to supply funds
to or in any manner to invest in, directly or indirectly, the debtor, to
purchase Indebtedness, or to assure the owner of Indebtedness against loss,
through an 


                                       18
<PAGE>   19

agreement to purchase goods, supplies or services for the purpose of enabling
the debtor to make payment of the Indebtedness held by such owner or otherwise;
(iv) obligations to reimburse issuers of any letters of credit; and (v) purchase
money financing for capital expenditures.

      "Indenture" shall mean that Indenture dated as of September 29, 1997
pursuant to which the Senior Secured Notes have been issued.

      "Junior Securities" shall mean any of the Corporation's Common Stock and
all other equity securities of the Corporation other than the Series B Preferred
and any other shares of the Corporation's preferred stock (a) which by their
terms, state that they are not Junior Securities or provide the holders thereof
with rights pari passu with or senior to those of the holders of Series B
Preferred and (b) are approved for issuance in accordance with Section 3 hereof.

      "Majority of the Series B Holders" shall mean the holders of more than
fifty percent (50%) of the then outstanding Series B Preferred.

      "Mandatory Conversion" shall have the meaning given such term in Section
5(b) of this Certificate of Designation.

      "Market Threshold" shall have the meaning given such term in Section 2(b)
of this Certificate of Designation.

      "Optional Conversion" shall have the meaning given such term in Section
5(a) of this Certificate of Designation.

      "Optional Redemption" shall have the meaning given such term in Section
6(a) of this Certificate of Designation.

      "Optional Redemption Date" shall have the meaning given such term in
Section 6(a) of this Certificate of Designation.

      "Optional Redemption Price" shall have the meaning given such term in
Section 6(a) of this Certificate of Designation.

      "Original Issue Date" means __________________, 1999.

      "Person" shall mean an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.

      "Qualified Return" shall have the meaning given to such term in Section
4(a).


                                       19
<PAGE>   20

      "Required Board Approval" shall mean the majority vote or written consent
of a majority of the Board of Directors of the Corporation or a Subsidiary, as
applicable, including that member designated by a Majority of the Series B
Holders (the "Investor Designee"), or, if there is more than one Investor
Designee, that Investor Designee that has been designated in writing by a
Majority of the Series B Holders as the person whose approval is necessary for
purposes of this definition.

      "Restricted Action" shall have the meaning given such term in Section 3(b)
of this Certificate of Designation.

      "Sale Notice" shall have the meaning given such term in Section 3(e) of
the Certificate of Designation.

      "Sale of the Company" shall mean a single transaction or series of
transactions between the Corporation and/or its stockholders and any Person or
group of Persons (as such term is used in Sections 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended) pursuant to which such Person or
group of Persons will (i) acquire shares of capital stock of the Corporation
possessing more than 50% of the voting power of the Corporation, including by
way of merger or consolidation or otherwise, or (ii) acquire all or
substantially all of the assets of the Corporation and its Subsidiaries
(determined on a consolidated basis); notwithstanding the foregoing definition,
a single transaction or series of transactions shall not be deemed a Sale of the
Company unless such transaction or series of transactions is also deemed a
"Change of Control", as defined in the Indenture.

      "Senior Secured Notes" means the $160,000,000 principal amount of 13%
Senior Secured Notes due 2004 that have been issued pursuant to the Indenture.

      "Series B Conversion Price" shall have the meaning given such term in
Section 5(d) of this Certificate of Designation.

      "Series B Conversion Rate" shall have the meaning given such term in
Section 5(c) of this Certificate of Designation.

      "Series B Holders" shall mean the holders of Series B Preferred.

      "Series B Liquidation Value" means Nine Dollars ($9.00), provided if the
Corporation at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) the Series B Preferred into a greater number of
shares or if the Corporation at any time combines (by reverse stock split or
otherwise) the outstanding shares of the Series B Preferred into a smaller
number of shares, then the Series B Liquidation Value in effect immediately
prior to such subdivision or combination shall be proportionately adjusted.


                                       20
<PAGE>   21

      "Series B Preferred" shall have the meaning given such term in Section 1
of this Certificate of Designation.

      "Special Restricted Action" shall have the meaning given such term in
Section 3(c) of this Certificate of Designation.

      "Stock Option Plan" shall mean the Corporation's Stock Option Plan, as
adopted by the Board of Directors on June 30, 1996, and as amended to date.

      "Subsidiary" shall mean any Person as to which the Corporation owns,
directly or indirectly, either (a) 50% or more of such Person's stock (or
similar voting interests) entitled to vote generally in the election of
directors (or other governing body) or (b) 50% or more of the capital or profits
interest of such Person.

      13. Severability of Provisions. If any right, preference or limitation of
the Series B Preferred set forth in this Certificate of Designation (as such
Certificate of Designation may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule, law or public
policy, all other rights preferences and limitations set forth in this
Certificate of Designation (as so amended) which can be given effect without
implicating the invalid, unlawful or unenforceable right preference or
limitation shall, nevertheless, remain in full force and effect, and no right,
preference or limitation herein set forth shall be deemed dependent upon any
other right, preference or limitation unless so expressed herein.

                   [Signatures are on the following page.]


                                       21
<PAGE>   22

      IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be signed by its President, and attested to by its Secretary, on
____________________________, 1999.

                                     MGC COMMUNICATIONS, INC.


                                          By:
                                             -------------------------------
                                          Name: Nield J. Montgomery
                                          Title:  President

                                          Attest:
                                                 ---------------------------
                                          Name:
                                          Title: Secretary


STATE OF NEVADA      )
ss.:                 )
COUNTY OF CLARK      )

      On the ___ day of _____________, 1999, before me personally came Nield J.
Montgomery to me known, who, being by me duly sworn, did depose and say he
resides at 8825 LaMadre, Las Vegas, Nevada 89129 and that he is the President of
MGC Communications, Inc., the corporation described in and which executed the
above instrument; and that he acknowledged said instrument to be the free act
and deed of said corporation.


_____________________________________
Notary Public
My Commission Expires:_______________


                                       22