State of Delaware
                                                         Secretary of State
                                                     Division of Corporations
                                                   Delivered 11:30 AM 04/16/2003
                                                     FILED 11:30 AM 04/16/2003
                                                   SRV 030249540 - 3089499 FILE


                          PARAGON FINANCIAL CORPORATION

               Certificate  of  Designations  of Preferred  Stock  Authorized by
               Resolution  of the Board of Directors  Providing  for an Issue of
               3,000  Shares of  Preferred  Stock,  all of which are  Designated
               "Series E Preferred Shares."

               PARAGON FINANCIAL CORPORATION (the "Corporation"),  a corporation
organized  and  existing  under  the  General  Corporation  Law of the  State of
Delaware,  in accordance  with the  provisions of Section 151 of Title 8 thereof
and Article IV of the Corporation's  Certificate of  Incorporation,  DOES HEREBY
CERTIFY THAT:

               Pursuant to  authority  conferred  upon the Board of Directors by
the Certificate of Incorporation of the Corporation, said Board of Directors, by
unanimous  written consent,  adopted a resolution  providing for the issuance of
Three Thousand  (3,000) shares of the  Corporation's  Preferred Stock, par value
$.0001 per share, all of which is designated  "Series E Preferred Shares," which
resolution is as follows:

               RESOLVED,  that, pursuant to the authority vested in the Board of
               Directors of the Corporation by the Certificate of Incorporation,
               the Board of Directors  does hereby provide for and authorize the
               issuance of Three Thousand  (3,000) shares of the Preferred Stock
               of  the   Corporation,   par  value  $.0001  per  share,  of  the
               Corporation, all of which is to be designated "Series E Preferred
               Shares"  of the  presently  authorized  but  unissued  shares  of
               Preferred  Stock. The voting powers,  designations,  preferences,
               and relative, participating,  optional or other special rights of
               the  Series  E  Preferred  Shares  authorized  hereunder  and the
               qualifications,  limitations and restrictions of such preferences
               and rights are as follows:

               (i) Stated Value.  The stated value per Series E Preferred  Share
                   ------------
          is One Thousand Dollars ($1,000) per share (the "Stated Value").

               (ii)  Dividends.  Each share of Series E Preferred Stock shall be
                     ---------
          entitled to receive a mandatory  dividend  equal to 4.0% of the Stated
          Value  per  annum.  Such  dividend  shall be  cumulative  and shall be
          payable annually on January 1st (the "Dividend  Payment Date") of each
          year  and  shall  be  payable  in  whole  or  in  part,   and  in  the
          Corporation's   sole   discretion,   in  either   (i)  shares  of  the
          Corporation's  common  stock,  each such share  valued at the  average
          market price of the  Corporation's  publicly  traded  shares of common
          stock over the thirty (30)  consecutive  trading  days  preceding  the
          Dividend Payment Date or, if the Corporation's  shares of common stock
          are not  then  publicly  traded,  then at a  value  determined  by the
          Corporation's Board of Directors, or (ii) cash.



<PAGE>

               (iii) Voting Rights.  The Series E Preferred Shares shall have no
                     -------------
          voting rights.

               (iv)  No  Redemption.  The  Series  E  Preferred  Shares  are not
                     --------------
          redeemable.

               (v)  No  Conversion.  The  Series  E  Preferred  Shares  are  not
                    --------------
          convertible.

               (vi)  Liquidation  Preference.  In the event of any  voluntary or
                     -----------------------
          involuntary liquidation, dissolution or winding up of the Corporation,
          the holders of Series E Preferred  Shares will be entitled to receive,
          prior and in preference to any  distribution  of the assets or surplus
          funds of the  Corporation to the holders of any shares of common stock
          by reason of the ownership  thereof,  an amount equal to the fixed sum
          of the Stated Value per share and any accrued dividends thereof and no
          more (the "Preferential  Amount").  If, upon the occurrence of such an
          event,  the assets and funds thus  distributable  among the holders of
          Series E Preferred  Shares shall be insufficient to permit the payment
          to such  holders of the full  Preferential  Amount,  then,  the entire
          assets and funds of the Corporation legally available for distribution
          to the holders of the Series E Preferred  Shares shall be  distributed
          ratably among such holders in accordance  with the respective  amounts
          which would be payable on such shares if all amounts  payable  thereon
          were paid in full.  After the  payment  or  setting  apart of the full
          Preferential  Amount  required  to be paid to the  holders of Series E
          Preferred  Shares,  the holders of shares of common stock or any other
          stock of the Corporation ranking in liquidation junior to the Series E
          Preferred  Shares shall be entitled to receive  ratably all  remaining
          assets or  surplus  funds of the  Corporation.  Neither  the merger or
          consolidation of the Corporation, nor the sale, lease or conveyance of
          all or  part of its  assets,  shall  be  deemed  to be a  liquidation,
          dissolution  or winding up of the affairs of the  Corporation,  either
          voluntarily or involuntarily, within the meaning of this section.

               (vii) Rank. All Series E Preferred  Shares shall rank (A), to the
                     ----
          extent of the Preferential  Amount,  prior to the Corporation's common
          stock and thereafter in accordance with Section (vi); (B) prior to any
          class or series of capital stock of the Corporation hereafter created,
          unless  such class or series of  capital  stock  specifically,  by its
          terms,  ranks  senior to or pari  passu  with the  Series E  Preferred
          Shares (collectively with the Common Stock, "Junior Securities");  (C)
          pari  passu  with  any  class  or  series  of  capital  stock  of  the
          Corporation  hereafter created specifically  ranking, by its terms, on
          parity with the Series E Preferred  Stock; and (D) junior to any class
          or  series  of  capital  stock of the  Corporation  hereafter  created
          specifically  ranking,  by its terms, senior to the Series E Preferred
          Stock,  in each case as to  distribution  of assets upon  liquidation,
          dissolution  or winding up of the  Corporation,  whether  voluntary or
          involuntary.




<PAGE>



               (viii)  Issuance of  Additional  Series E Preferred  Shares.  The
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          Corporation  shall be  prohibited  from issuing any Series E Preferred
          Shares without the prior written  consent of the holders of a majority
          of the Series E Preferred Shares then outstanding,  provided, however,
          the Corporation  shall be permitted to issue Series E Preferred Shares
          to any person or entity then holding Series E Preferred Shares without
          the prior written consent of the holders of a majority of the Series E
          Preferred Shares then outstanding.

     IN  WITNESS  WHEREOF,   PARAGON  FINANCIAL   CORPORATION  has  caused  this
Certificate  to be  executed  by its Chief  Executive  Officer  this 26th day of
March, 2003.

                                                  PARAGON FINANCIAL CORPORATION

                                                  By: /s/ Steven A. Burleson
                                                      ----------------------
                                                      Steven A. Burleson
                                                      Chief Executive Officer