Document:

<Page>

                                                                    EXHIBIT 10.1

                                ESCROW AGREEMENT

         THIS ESCROW AGREEMENT (the "Agreement") is made and entered into as of
the 5th day of September, 2001, by and among GLOBAL EXPRESS CAPITAL REAL ESTATE
INVESTMENT FUND I, LLC, a Nevada limited liability company (the "Company"),
GLOBAL EXPRESS SECURITIES, INC., a Nevada corporation ("GES"), and Southwest
Escrow Company (the "Escrow Agent").

                                   WITNESSETH:

         WHEREAS, the Company is offering units representing membership
interests in the Company ("Units"), by means of a Prospectus dated September __,
2001 (the "Prospectus") as filed by the Company with the Securities and
Exchange Commission as part of Registration Statement No. 333- 55098 on Form
S-11, under the Securities Act of 1933, as amended; and

         WHEREAS, the Company is managed by Conrex Financial International,
Inc., a Nevada corporation doing business as Global Express Capital Mortgage
(the "Manager"); and

         WHEREAS, pursuant to the Prospectus, the Company has engaged GES, a
NASD licensed broker and affiliate of the Manager, to offer and sell Units on
a best efforts minimum $1,500,000 (the "Minimum Proceeds"), maximum $100,000,000
basis; and

         WHEREAS, the Company and GES have entered into an agreement whereby
GES will act as underwriter for the offering of the Units (the "Underwriting
Agreement"); and

         WHEREAS, pursuant to the Prospectus and the Underwriting Agreement,
the proceeds to the Company from the sale of the Units to the Investors are
required to be held in escrow pending receipt of the Minimum Proceeds from
the sale of the Units; and

         WHEREAS, the Prospectus contemplates that the Escrow Agent will serve
as agent and custodian on the terms and subject to the conditions provided
herein.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:

         1. The Company and GES hereby appoint the Escrow Agent as their agent
and custodian for the purposes of this Agreement, and the Escrow Agent accepts
such appointment, upon the terms and subject to the conditions set forth herein.

         2. During the term of this Agreement, the Escrow Agent shall do the
following: (a) hold, on its behalf and on behalf of each Investor, the amounts
delivered to the Escrow Agent from time to time by the Company and GES pursuant
to Section 3 hereof, (b) deposit all subscription amounts received by the
Escrow Agent hereunder in a separate account maintained by the Escrow Agent
which enables the

<Page>

Escrow Agent to transmit or return appropriate subscription amounts and/or
interest earned thereon to the person and/or entity entitled thereto when the
appropriate event has occurred or fails to occur in accordance with Section 6
hereof; (c) either deposit the subscription amounts received in an interest
bearing account or invest the amounts deposited in short-term securities
issued or guaranteed by the United States Government (all interest paid or
earnings on the amounts deposited are hereinafter referred to as "interest")
(d) maintain a complete record of the name and address of each Investor, the
number of Units subscribed for by such Investor, and the amount paid for
those Units by such Investor; and (e) to otherwise perform its duties and
responsibilities under this Agreement.

         3. Until the Minimum Proceeds are deposited with the Escrow Agent,
the Company and GES hereby agree to deliver to the Escrow Agent all proceeds
from subscriptions for the Units received from Investors within the next
business day from the date of receipt of such proceeds.

         4. From time to time during the term of this Agreement, the Company
shall deliver notice to the Escrow Agent that subscriptions have been accepted
by the Company.

         5. Following receipt of the Minimum Proceeds from the subscriptions
for the Units prior to ___________, 2002 (six months from the effective date of
the Prospectus), the Escrow Agent shall promptly deliver written notice to the
Company and GES confirming its receipt of such amount.

         6. The Escrow Agent shall deliver the Minimum Proceeds with interest as
follows:

         (a)      To the Company promptly in the event that the Escrow Agent has
                  received written notice from GES that the Minimum Proceeds
                  have been deposited with the Escrow Agent.

         (b)      To the Investors in the amount of their respective
                  subscriptions with their allocable share of interest in the
                  event that the conditions specified in Section 6(a) of this
                  Agreement are not satisfied by __________, 2002 (six months
                  from the effective date of the Prospectus).

         7. In the event that the Minimum Proceeds are disbursed in accordance
with Section 6(a) of this Agreement, the Escrow Agent shall deposit any
additional subscriptions that it receives in an escrow account established in
the name of "GES for the benefit of subscribers of Global Express Capital
Real Estate Investment Fund I, LLC," and said Escrow Agent shall disburse
such additional funds and any interest earned thereon upon the sole direction
of GES without reference to the obligations of the Escrow Agent prior to the
disbursement of the Minimum Proceeds.

         8. The Escrow Agent hereby accepts its obligations under this
Agreement, and represents that it has the power and legal authority to enter
into this Agreement and perform its obligations hereunder. The Escrow Agent
further agrees that all property held by the Escrow Agent hereunder shall be
identified as being held in connection with this Agreement. The Escrow Agent
agrees that its documents and records, with respect to the transactions
contemplated hereby will be available for examination by the Company, GES,
and the Investors.

                                        2
<Page>

         9. The Escrow Agent shall be entitled to receive from the Company, from
time to time, (i) reasonable compensation for its services hereunder, and (ii)
reimbursement for any reasonable expenses incurred by it hereunder. The
Escrow Agent shall not have a lien upon, or any other right whatsoever to
payment from, the property held hereunder by the Escrow Agent, for or on
account of such right to payment and reimbursement or otherwise, EXCEPT that
the Escrow Agent, upon receipt of written consent from GES, shall be entitled
to withdraw from the interest earned only on the subscription amounts held
hereunder, reasonable administrative expenses incurred by the Escrow Agent
for its services hereunder.

         10. The Escrow Agent shall not have any duties or responsibilities
hereunder except as expressly set forth herein; shall have no investment
responsibility with respect to funds or other property held hereunder; and shall
have no responsibility for ascertaining or taking any action with respect to
calls, conversions, exchanges, maturities, tenders, or other matters relating
to any property held by it hereunder, whether or not the Escrow Agent has or
is deemed to have knowledge or notice of such matters, or taking any steps to
preserve rights against any parties with respect to any properly held
hereunder.

         11. The Escrow Agent shall be entitled to rely upon any notice,
certificate, affidavit, letter, document, or other communication which is
believed by the Escrow Agent to be genuine and to have been signed or sent by
the proper party or parties, and may rely oil statements contained therein
without further inquiry or investigation.

         12. The Escrow Agent shall not be liable for any action taken in
accordance with the terms of this Agreement, including without limitation, any
release of amounts held by it hereunder in accordance with Sections 6, 7, and 16
of this Agreement. The Escrow Agent shall not be liable for any other action or
failure to act under or in connection with this Agreement, except for its own
willful misconduct.

         13. In the event of any disagreement between the Company, GES, and/or
the Investors, or any other person, or any of them, resulting in an adverse
claim to funds or property held hereunder, the Escrow Agent shall be entitled at
its option to refuse to comply with any such claim and shall not be, liable for
damages or interest to any such person or persons for its failure to comply with
such adverse claims; and the Escrow Agent shall be entitled to continue to so
refrain until:

         (a)      The rights of the averse claimants shall have been finally
                  adjudicated by a court of competent jurisdiction; or

         (b)      All differences shall have been adjusted by agreement and the
                  Escrow Agent shall have been notified thereof in a writing
                  signed by all interested persons.

In the event of such disagreement, the Escrow Agent in its discretion may file a
suit in interpleader for the purpose of having the respective rights of the
claimants of such funds or other property adjudicated.

                                        3
<Page>

Notwithstanding anything contained herein to the contrary, in the event of any
dispute or disagreement between the Company, GES, and/or the Investors, or any
of them, regarding this Agreement or any of the funds or property held by the
Escrow Agent hereunder, which dispute or disagreement is not settled or
otherwise resolved within thirty (30) days after written notice of such
dispute is delivered to the Escrow Agent, GES may, in its sole and absolute
discretion, send written notice instructing the Escrow Agent to return the
funds held by it hereunder to the Investors in accordance with Sections 6(b)
hereof, pending the resolution of such dispute or disagreement. The Escrow
Agent shall have no further obligation or responsibility with respect to the
return of any such funds under this Section 13.

         14. The Company and GES, jointly and severally, indemnify the
Escrow Agent, and hold the Escrow Agent harmless, from and against any and all
claims, costs, expenses, demands, judgments, losses, damages, and liabilities
(including, without limitation. reasonable attorneys' fees and expenses) arising
out of or in connection with this Agreement, including without limitation any
action brought by the Escrow Agent pursuant to Section 13 hereof, except such as
may be caused by the willful misconduct of the Escrow Agent.

         15. The Escrow Agent may at any time resign by giving prior written
notice of such resignation to the Company and GES. The Escrow Agent shall not
be discharged from its duties and obligations hereunder until a successor
custodian shall have been designated by the Company and GES, and shall have
executed and delivered an Escrow Agreement in substantially the form of this
Agreement, and all property then held by the Escrow Agent hereunder shall
have been delivered to such successor custodian.

         16. The term of this Agreement shall commence as of the date hereof and
shall terminate upon the earlier to occur of the following:

         (a)      Disbursement of all amounts held by the Escrow Agent hereunder
                  pursuant to Sections 6 or 7 hereof and satisfaction of its
                  other duties and responsibilities hereunder; or

         (b)      Receipt by the Escrow Agent of written notice executed by the
                  Company and GES providing for the termination of this
                  Agreement and designating the manner of distribution of the
                  items deposited with the Escrow Agent.

         17. All communications or notices required under this Agreement shall
be deemed to have been given on the date when delivered personally or deposited
in the United States mail, postage prepaid, and addressed as follows (unless and
until any of such parties advises the other in writing of a change in such
address):

         (a)      if to the Company:

                  Global Express Capital Real Estate Investment Fund I, LLC
                  8540 South Eastern Avenue, Suite 200
                  Las Vegas, Nevada 89123

                                        4
<Page>

         (b)      if to GES:

                  Global Express Securities, Inc.
                  8540 South Eastern Avenue, Suite 210
                  Las Vegas, Nevada 89123

         (c)      if to the Escrow Agent:

                  Southwest Escrow Company
                  401 North Buffalo Drive, Suite 205
                  Las Vegas, Nevada 89145

         18. This Agreement shall be binding and inure to the benefit of the
parties hereto and their respective successors and assigns. Nothing therein is
intended or shall be construed to give any other person any right, remedy or
claim under, in or with respect to this Agreement or any property held hereunder
except as specifically set forth herein with respect to the Investors.

         19. This Agreement shall be governed by, and be construed and
interpreted in accordance with, the internal laws of the State of Nevada.

         20. This Agreement may be entered into in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed and delivered by their duly authorized
officers on the date first above written.

GLOBAL EXPRESS CAPITAL REAL
ESTATE INVESTMENT FUND I, LLC                 GLOBAL EXPRESS SECURITIES, INC.,

Conrex International Financial Inc.,
d/b/a Global Express Capital Mortgage,
Its Sole Manager

By: /s/ Connie S. Farris                      By: /s/ John Tooke
    -----------------------------                 ------------------------------
    Connie S. Farris, President                   John Tooke, President

SOUTHWEST ESCROW COMPANY

By: /s/ Dale E. Puhl
    -----------------------------
    Dale E. Puhl, President

                                        5<Page>

                                                                    EXHIBIT 4.13

                           CERTIFICATE OF DESIGNATIONS

                    CERTIFICATE OF DESIGNATIONS, PREFERENCES
                    AND RELATIVE, PARTICIPATING, OPTIONAL AND
                     OTHER SPECIAL RIGHTS OF PREFERRED STOCK
                         AND QUALIFICATIONS, LIMITATIONS
                            AND RESTRICTIONS THEREOF

                                       OF

                              SERIES A CONVERTIBLE
                                 PREFERRED STOCK

                                       OF

                               ELECTRIC CITY CORP.

                         PURSUANT TO SECTION 151 OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

          Electric City Corp., a Delaware corporation (the "CORPORATION"),
certifies that pursuant to the authority contained in Article 4 of its Amended
and Restated Certificate of Incorporation (the "CERTIFICATE OF INCORPORATION")
and in accordance with the provisions of Section 151 of the General Corporation
Law of the State of Delaware, the Board of Directors of the Corporation at a
meeting called and held on July 27, 2001 adopted the following resolution, which
remains in full force and effect on the date hereof:

          RESOLVED, that there is hereby established a series of
          authorized preferred stock having a par value of $.01 per
          share, which series shall be designated as "SERIES A
          CONVERTIBLE PREFERRED STOCK," shall consist of 3,700,000
          shares and shall have the following voting powers,
          preferences and relative, participating, optional and other
          special rights, and qualifications, limitations and
          restrictions thereof as follows:

          1.   DEFINITIONS. The following terms when used herein shall, except
where the context otherwise requires, have the following meanings, such meanings
to be equally applicable to the singular and plural forms thereof:

                                       1
<Page>

          "BOARD" means Board of Directors of the Corporation.

          "BUSINESS DAY" means a day other than a Saturday or Sunday, or other
day on which commercial banks in the City of New York are authorized or required
by law or executive order to close.

          "BY-LAWS" means the by-laws of the Corporation.

          "CHANGE OF CONTROL TRANSACTION" means a transaction which results in
the occurrence of any of the following events: (i) any "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934 (the "Exchange Act")) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 40% of the total
outstanding voting stock of the Corporation; (ii) the Corporation consolidates
with or merges with or into another person or conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any person, or
any person consolidates with or merges with or into the Corporation, in any such
event, pursuant to a transaction in which the outstanding voting stock of the
Corporation is converted into or exchanged for cash, securities or other
property; (iii) any person consolidates with or merges with or into a subsidiary
of the Corporation and such consolidation or merger results in the transfer of
fifty percent (50%) or more of the outstanding voting power of the Corporation
or results in the holders of the outstanding voting securities of this
Corporation immediately prior to such transaction holding less than a majority
of the voting securities of this Corporation or the surviving entity immediately
thereafter; or (iv) the Corporation is liquidated or dissolved or a special
resolution is passed by the stockholders of the Corporation approving the plan
of liquidation or dissolution.

          "CLOSING PRICE" means the closing price of the Common Stock as
reported on the American Stock Exchange (or, if not traded on the American Stock
Exchange, any national security exchange or automated quotation services on
which the Common Stock is then listed for trading).

          "COMMON STOCK" means the Corporation's authorized common stock, par
value $.0001 per share.

          "CONVERSION DATE" shall have the meaning set forth in SECTION 7(c)
hereof.

          "CONVERSION PRICE" shall have the meaning set forth in SECTION 7(a)
hereof.

          "CONVERSION SHARES" shall have the meaning set forth in SECTION 7(a)
hereof.

          "CONVERTIBLE SECURITIES" shall have the meaning set forth in SECTION
7(e)(i) hereof.

          "DIVIDEND PAYMENT DATE" shall have the meaning set forth in SECTION
3(a) hereof.

          "DIVIDEND RATE" shall have the meaning set forth in SECTION 3(a)
hereof.

                                       2
<Page>

          "DIVIDEND RECORD DATE" shall have the meaning set forth in SECTION
3(a) hereof.

          "JUNIOR STOCK" shall have the meaning set forth in SECTION 3(b)
hereof.

          "LIQUIDATION AMOUNT" means the higher of (i) 200% of the Stated Value
plus any accrued but unpaid dividends, and (ii) the Market Price of the number
of shares of Common Stock into which one (1) share of Series A Preferred Stock
is convertible.

          "MARKET PRICE" shall have the meaning set forth in SECTION 7(e)(vi)
hereof.

          "NOTICE OF REDEMPTION" shall have the meaning set forth in SECTION
5(c) hereof.

          "PARITY STOCK" means any class or series of stock of the Corporation
authorized after the date of issuance of the Series A Preferred Stock in
accordance with SECTION 6(e) hereof ranking on a parity with the Series A
Preferred Stock in respect of the right to receive dividends or the right to
participate in any distribution upon liquidation.

          "PERSON" means an individual, a corporation, a limited liability
company, an association, a partnership, a trust or estate, a government or any
department or agency thereof.

          "PURCHASE RIGHTS" shall have the meaning set forth in SECTION 7(f)(ii)
hereof.

          "REDEMPTION DATE" shall have the meaning set forth in SECTION 5(c)
hereof.

          "REDEMPTION PRICE" shall have the meaning set forth in Section 5(b)
hereof.

          "SECURITIES PURCHASE AGREEMENT" means that certain Securities Purchase
Agreement dated as of July 31, 2001 by and among the Corporation and certain
investors party thereto, as the same may be amended from time to time.

          "SENIOR STOCK" means any class or series of stock of the Corporation
authorized after the date of issuance of the Series A Preferred Stock in
accordance with SECTION 6(e) hereof ranking senior to the Series A Preferred
Stock in respect of the right to receive dividends or the right to participate
in any distribution upon liquidation.

          "SERIES A PREFERRED STOCK" shall have the meaning set forth in SECTION
2 hereof.

          "SERIES A PREFERRED STOCK ISSUE DATE" means the date of the initial
Closing (as defined therein) under the Securities Purchase Agreement.

          "STATED VALUE" shall have the meaning set forth in SECTION 2 hereof.

          2.   DESIGNATION AND AMOUNT. The designation of the series of the
Preferred Stock shall be "Series A Convertible Preferred Stock," par value $.01
per share (the "SERIES A PREFERRED STOCK"). The number of shares of Series A
Preferred Stock shall be 3,700,000. The Series A Preferred Stock shall be
assigned a stated value of $10.00 per share (as adjusted for stock splits, stock
combinations, recapitalizations and the like, the "STATED VALUE").

          3.   DIVIDENDS.

                                       3
<Page>

               (a)  RATE, ETC. The holders of shares of Series A Preferred Stock
shall be entitled to receive, when and if declared by the Board of Directors out
of funds legally available therefor, cumulative dividends from the date of issue
thereof, on the Stated Value plus any accrued but unpaid dividends, at an annual
rate equal to ten percent (10%) (the "DIVIDEND RATE") through and including the
first Dividend Payment Date following the third anniversary of the Series A
Preferred Stock Issue Date, after which the Dividend Rate shall increase by
one-half of one percent (0.5%) every six months up to a maximum rate of fifteen
percent (15%) per annum. Dividends hereunder shall be calculated on the basis of
a 360-day year consisting of twelve 30-day months, accruing and payable
quarterly, in arrears, on the last day in June, September, December and March of
each year (each a "DIVIDEND PAYMENT DATE"), commencing on September 30, 2001
until such time as the Series A Preferred Stock is retired in full; PROVIDED,
HOWEVER, that with respect to such first Dividend Payment Date, the holders of
shares of Series A Preferred Stock shall be entitled to receive, when and if
declared by the Board of Directors out of funds legally available therefor, a
cumulative dividend in respect of each share of Series A Preferred Stock in the
amount of (i) $0.25 multiplied by (ii) a fraction equal to (A) the number of
days from (and including) the date of the Securities Purchase Agreement to (but
excluding) such Dividend Payment Date divided by (B) 90. If any Dividend Payment
Date occurs on a day that is not a Business Day, any accrued dividends otherwise
payable on such Dividend Payment Date shall be paid on the next succeeding
Business Day with the same effect as though made on such Dividend Payment Date.
Through and including the first Dividend Payment Date following the third
anniversary of the Series A Preferred Stock Issue Date, dividends on the Series
A Preferred Stock may be paid in cash or additional shares of Series A Preferred
Stock at the sole discretion of the Board. The cash equivalent of a share of
Series A Preferred Stock shall be the Stated Value. After the first Dividend
Payment Date following the third anniversary of the Series A Preferred Stock
Issue Date, dividends on the Series A Preferred Stock shall be paid by the
Corporation in cash only. Dividends shall accrue and be cumulative with respect
to each share of Series A Preferred Stock from the date of original issuance
whether or not earned or declared. Except as otherwise required by law, the
"DIVIDEND RECORD DATE" with respect to the next succeeding Dividend Payment Date
shall be the date ten (10) Business Days prior to such Dividend Payment Date.
Upon conversion of any shares of Series A Preferred Stock, dividends shall be
paid as provided in SECTION 7 hereof.

               (b)  RANK, ETC.

               Unless full dividends, if applicable, on all outstanding shares
of Series A Preferred Stock that have previously become due and payable, have
been paid or are contemporaneously declared and paid (or declared and a sum
sufficient for the payment thereof is set apart for such payment), the
Corporation shall not (i) declare or pay any dividend on (A) the Series A
Preferred Stock, except if such dividend is allocated pro rata on a
share-by-share basis among all shares of Series A Preferred Stock at that time
outstanding, (B) any other class of Parity Stock, except if such dividend is
allocated pro rata on a share-by-share basis among all shares of Series A
Preferred Stock and any other class of Parity Stock at that time outstanding
taken together as a class, (C) the Common Stock or (D) on any other class or
series of stock ranking junior to the Series A Preferred Stock as to dividends
or upon liquidation (the Common Stock and any such junior class or series being
the "JUNIOR STOCK") or make any payment on account of, or set apart money for, a
sinking or other analogous fund for the purchase, redemption or other retirement
of, any Parity Stock or Junior Stock or make any distribution in

                                       4
<Page>

respect thereof, either directly or indirectly and whether in cash or property
or in obligations or shares of the Corporation or (ii) purchase or redeem any of
the shares of Series A Preferred Stock, unless such purchase or redemption is
pursuant to SECTION 5 or SECTION 6(e)(i)(D), or purchase or redeem any shares of
Parity Stock or Junior Stock then outstanding, unless such purchase or
redemption is approved in accordance with SECTION 6(e) hereof. If any dividend
is paid on the Common Stock, the holders of shares of Series A Preferred Stock
shall be entitled to receive, in addition to dividends as provided in SECTION
3(a) hereof, additional dividends to the extent necessary so that the aggregate
dividends paid on Series A Preferred Stock from the issue date thereof shall not
be less than the aggregate dividends paid on Common Stock during the
corresponding period.

          4.   LIQUIDATION.

               (a)  PREFERENCE UPON LIQUIDATION, DISSOLUTION OR WINDING UP. In
the event of any liquidation, dissolution or winding up of the affairs of the
Corporation (any or all of such events, a "LIQUIDATION"), whether voluntary or
involuntary, subject to the prior preferences and other rights of any Senior
Stock, if any, as to liquidation preferences, the holders of shares of Series A
Preferred Stock then outstanding shall be entitled first as if members of a
single class of securities with the holders of any Parity Stock, if any, to be
paid out of the assets of the Corporation, before any payment shall be made to
the holders of the Junior Stock, the Liquidation Amount per outstanding share.
Except as provided in this SECTION 4(a), holders of Series A Preferred Stock
shall not be entitled to any distribution in the event of a liquidation.

               (b)  INSUFFICIENT ASSETS. If, upon any liquidation pursuant to
SECTION 4(a), the assets of the Corporation are insufficient to pay the holders
of shares of the Series A Preferred Stock and any Parity Stock, if any, then
outstanding the full amount to which they shall be entitled, such assets shall
be distributed to each holder of the Series A Preferred Stock and Parity Stock,
if any, pro-rata based on the number of shares of Series A Preferred Stock and
Parity Stock, if any, held by each.

               (c)  RIGHTS OF OTHER HOLDERS. In the event of any liquidation
pursuant to SECTION 4(a), after payment shall have been made to the holders of
the Series A Preferred Stock and Parity Stock, if any, of all preferential
amounts to which they shall be entitled, the holders of shares of Junior Stock
shall receive such amounts as to which they are entitled by the terms thereof.

          5.   REDEMPTION.

               (a)  MANDATORY REDEMPTION. The Series A Preferred Stock shall not
be subject to mandatory redemption by the Corporation.

               (b)  OPTIONAL REDEMPTION. Through and including the third
anniversary of the Series A Preferred Stock Issue Date, the shares of Series A
Preferred Stock may not be redeemed by the Corporation. At any time after the
third anniversary of the Series A Preferred Stock Issue Date, all, but not less
than all, of the outstanding shares of Series A Preferred Stock may be redeemed,
at the option of the Corporation, at a price per share equal to and in the form
of (i) cash in an amount equal to the Stated Value plus any accrued but unpaid

                                       5
<Page>

dividends, plus (ii) that number of fully paid and nonassessable shares of
Common Stock having a Market Price equal to seventy percent (70%) of the excess,
if any, of (x) the Market Price on the day immediately preceding the Redemption
Date of the number of shares of Common Stock into which a share of Series A
Preferred Stock is then convertible over (y) the Stated Value (such cash and
shares, the "REDEMPTION PRICE") if (A) the Closing Price exceeds $7.50 per share
(as adjusted for stock splits, stock combinations, recapitalizations and the
like) for at least the twenty (20) consecutive trading days immediately
preceding the date the Corporation sends a Notice of Redemption to all holders
of record of the Series A Preferred Stock and (B) the average daily trading
volume for such twenty (20) trading day period (as adjusted to exclude the
highest and lowest volume trading days during such period) exceeds 500,000
shares.

               (c)  MECHANICS OF REDEMPTION. A notice of redemption ("NOTICE OF
REDEMPTION") shall be sent by or on behalf of the Corporation not less than
fifteen (15) Business Days nor more than thirty (30) days prior to the date
specified for redemption in such notice (the "REDEMPTION DATE"), by first class
mail, postage prepaid, to all holders of record of the Series A Preferred Stock
at their last addresses as they shall appear on the books of the Corporation;
PROVIDED, HOWEVER, that no failure to give such notice or any defect therein or
in the mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of Series A Preferred Stock except as to the holder to
whom the Corporation has failed to give notice or except as to the holder to
whom notice was defective. In addition to any information required by law or by
the applicable rules of any exchange upon which the Series A Preferred Stock or
the Common Stock may be listed or admitted to trading, such notice shall state:
(i) that such redemption is being made pursuant to the optional redemption
provisions hereof; (ii) the Redemption Date; (iii) a description of the formula
for calculating the Redemption Price and the estimated amount of the Redemption
Price by component as of the date of the Notice of Redemption; (iv) that all the
outstanding shares of Series A Preferred Stock are to be redeemed; (v) the place
or places where certificates for such shares are to be surrendered for payment
of the Redemption Price; and (vi) that dividends on the shares of Series A
Preferred Stock will cease to accumulate on the Redemption Date. Upon the
mailing of any such Notice of Redemption, the Corporation shall become obligated
to redeem at the time of redemption specified therein all shares of Series A
Preferred Stock.

               (d)  If a Notice of Redemption has been mailed in accordance with
SECTION 5(c) above and if all funds and shares of Common Stock necessary for
such redemption shall have been set aside by the Corporation on or before the
Redemption Date, separate and apart from its other funds in trust for the
benefit of the holders of the outstanding shares of Series A Preferred Stock, so
as to be, and to continue to be available therefor, then dividends on the shares
of the Series A Preferred Stock so called for redemption shall cease to accrue
or accumulate on the Redemption Date, and such shares shall no longer be deemed
to be outstanding and shall not have the status of shares of Series A Preferred
Stock on the Redemption Date, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the Redemption Price) shall cease on the Redemption Date. Upon
surrender, in accordance with such Notice of Redemption, of the certificates for
any shares of Series A Preferred Stock so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and the Notice shall
so state), such shares of Series A Preferred Stock shall be redeemed by the
Corporation at the Redemption Price.

                                       6
<Page>

               (e)  OPTION TO CONVERT. Notwithstanding the delivery by the
Corporation of a Notice of Redemption, each holder of Series A Preferred Stock
may convert all or any portion of his, her or its shares of Series A Preferred
Stock into shares of Common Stock in accordance with SECTION 7(a) and SECTION
7(c) hereof until the close of business on the day prior to the Redemption Date.

          6.   VOTING RIGHTS.

               (a)  GENERAL. Except as to the election of directors and as to
any special approvals required under SECTION 6(e), as to which SECTIONS 6(b)-(f)
shall apply to the exclusion of any voting rights under this SECTION 6(a), the
holder of record of each share of Series A Preferred Stock shall have the right
to one vote for each share of Common Stock into which such share of Series A
Preferred Stock could then be converted, and with respect to such vote, such
holder of record shall have full voting rights and powers equal to the voting
rights and powers of the holders of Common Stock, and shall be entitled to
notice of any stockholders' meeting in accordance with the bylaws of the
Corporation, and shall be entitled to vote together with the holders of Common
Stock as a single class, with respect to any question upon which holders of
record of Common Stock have the right to vote, except as otherwise required by
applicable law. Fractional votes shall not, however, be permitted and any
fractional voting rights available on an as-converted basis (after aggregating
all shares into which shares of Series A Preferred Stock held by each holder of
record could be converted) shall be rounded to the nearest whole number (with
one-half being rounded upward).

               (b)  ELECTION OF DIRECTORS.

                    (i)  For so long as at least 800,000 shares of the Series A
Preferred Stock remain issued and outstanding (as adjusted for stock splits,
stock combinations, recapitalizations and the like), the holders of record of
the outstanding shares of Series A Preferred Stock, voting as a single class to
the exclusion of all other classes of the Corporation's capital stock, and with
each share of Series A Preferred Stock entitled to one (1) vote per share, shall
be entitled to elect four (4) directors of the Board of Directors of the
Corporation and shall not otherwise be permitted to vote with the holders of
record of Common Stock as to the election of directors of the Corporation. If
the holders of record of the Series A Preferred Stock for any reason fail to
elect anyone to fill any such directorship, such position shall remain vacant
until such time as the holders of record of the Series A Preferred Stock elect a
director to fill such position, and shall not be filled by resolution or vote of
the Corporation's Board of Directors or the Corporation's other stockholders.

                    (ii) For so long as at least 600,000 shares but less than
800,000 shares of the Series A Preferred Stock remain issued and outstanding (as
adjusted for stock splits, stock combinations, recapitalizations and the like),
the holders of record of the outstanding shares of Series A Preferred Stock,
voting as a single class to the exclusion of all other classes of the
Corporation's capital stock, and with each share of Series A Preferred Stock
entitled to one (1) vote per share, shall be entitled to elect three (3)
directors of the Board of Directors of the Corporation and shall not otherwise
be permitted to vote with the holders of record of Common Stock as to the
election of directors of the Corporation. If the holders of record of the Series
A Preferred Stock for any reason fail to elect anyone to fill any such
directorship, such position

                                       7
<Page>

shall remain vacant until such time as the holders of record of the Series A
Preferred Stock elect a director to fill such position, and shall not be filled
by resolution or vote of the Corporation's Board of Directors or the
Corporation's other stockholders.

                    (iii) For so long as at least 400,000 shares but less than
600,000 shares of the Series A Preferred Stock remain issued and outstanding (as
adjusted for stock splits, stock combinations, recapitalizations and the like),
the holders of record of the outstanding shares of Series A Preferred Stock,
voting as a single class to the exclusion of all other classes of the
Corporation's capital stock, and with each share of Series A Preferred Stock
entitled to one (1) vote per share, shall be entitled to elect two (2) directors
of the Board of Directors of the Corporation and shall not otherwise be
permitted to vote with the holders of record of Common Stock as to the election
of directors of the Corporation. If the holders of record of the Series A
Preferred Stock for any reason fail to elect anyone to fill any such
directorship, such position shall remain vacant until such time as the holders
of record of the Series A Preferred Stock elect a director to fill such
position, and shall not be filled by resolution or vote of the Corporation's
Board of Directors or the Corporation's other stockholders.

                    (iv) For so long as at least 200,000 shares but less than
400,000 shares of the Series A Preferred Stock remain issued and outstanding (as
adjusted for stock splits, stock combinations, recapitalizations and the like),
the holders of record of the outstanding shares of Series A Preferred Stock,
voting as a single class to the exclusion of all other classes of the
Corporation's capital stock, and with each share of Series A Preferred Stock
entitled to one (1) vote per share, shall be entitled to elect one (1) director
of the Board of Directors of the Corporation and shall not otherwise be
permitted to vote with the holders of record of Common Stock as to the election
of directors of the Corporation. If the holders of record of the Series A
Preferred Stock for any reason fail to elect anyone to fill any such
directorship, such position shall remain vacant until such time as the holders
of record of the Series A Preferred Stock elect a director to fill such
position, and shall not be filled by resolution or vote of the Corporation's
Board of Directors or the Corporation's other stockholders.

                    (v)  If less than 200,000 shares of the Series A Preferred
Stock remain issued and outstanding (as adjusted for stock splits, stock
combinations, recapitalizations and the like), each holder of record of the
outstanding shares of Series A Preferred Stock shall have the right to one vote
for each share of Common Stock into which such share of Series A Preferred Stock
could then be converted, and with respect to such vote, such holder of record
shall have full voting rights and powers equal to the voting rights and powers
of the holders of Common Stock, and shall be entitled to notice of any
stockholders' meeting in accordance with the bylaws of this Corporation, and
shall be entitled to vote together with holders of Common Stock as a single
class, with respect to the election of directors. Fractional votes shall not,
however, be permitted and any fractional voting rights available on an
as-converted basis (after aggregating all shares into which shares of Series A
Preferred Stock held by each holder of record could be converted) shall be
rounded to the nearest whole number (with one-half being rounded upward).

               The rights granted pursuant to SECTION 6(b)(i)-(iv) (if the four
individuals described in SECTION 6(b)(i) hereof have not already been appointed
by the Board on or prior to the Series A Preferred Stock Issue Date) may be
exercised by written consent of the holders of

                                       8
<Page>

Series A Preferred Stock, at a special meeting of the holders of Series A
Preferred Stock, called as provided for in SECTION 6(c), or at any annual
meeting of stockholders held for the purpose of electing directors.

               (c)  VACANCIES. If any director so elected by the holders of the
Series A Preferred Stock shall cease to serve as a director before his or her
term shall have expired, the holders of Series A Preferred Stock then
outstanding, by the written consent of the holders of Series A Preferred Stock
or at a special meeting of the holders of Series A Preferred Stock, may elect
the successor to hold such office. A special meeting of the holders of Series A
Preferred Stock may be called for upon the written request of the holders of
record of more than fifty percent (50%) of the shares of Series A Preferred
Stock then outstanding, addressed to the Secretary of the Corporation.
Thereafter, a proper officer of the Corporation shall call a special meeting of
the holders of Series A Preferred Stock, which shall be held at the earliest
practicable date upon the notice required for annual meetings of stockholders at
the place for holding annual meetings of stockholders of the Corporation or at
such other place designated by the Secretary of the Corporation. If such meeting
shall not be called by the proper officers of the Corporation within thirty (30)
days after the personal service of such written request upon the Secretary of
the Corporation, or within thirty (30) days after mailing the same within the
United States, by registered mail, addressed to the Secretary, of the receipt
issued by the postal authorities, then the holders of record of more than fifty
percent (50%) of the shares of Series A Preferred Stock then outstanding may
designate in writing a holder of Series A Preferred Stock to call such meeting
at the expense of the Corporation, and such meeting may be called by such person
so designated upon the notice required for annual meetings of stockholders and
shall be held at the place for holding annual meetings of the Corporation or, if
none, at a place designated by such holder. Any holder of record of Series A
Preferred Stock that would be entitled to vote at such meeting shall have access
to the stock books of the Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to the provisions of this SECTION 6(c).
Notwithstanding the provisions of this SECTION 6(c), however, no such special
meeting shall be called if any such request is received less than 90 days before
the date fixed for the next annual meeting of stockholders.

               (d)  REMOVAL. Any director elected by the holders of the Series A
Preferred Stock may be removed during such director's term of office, either for
or without cause, by and only by the holders of the Series A Preferred Stock, by
written consent of the holders of Series A Preferred Stock or at a special
meeting of holders of Series A Preferred Stock for that purpose.

               (e)  SPECIAL APPROVAL RIGHTS.

                    (i)  For so long as any shares of Series A Preferred Stock
remain issued and outstanding, the Corporation shall not, without the
affirmative written consent or approval of the holders of record representing
75% or more of the shares of Series A Preferred Stock then outstanding, voting
as a single class to the exclusion of all other classes of the Corporation's
capital stock (such consent or approval to be given by written consent in lieu
of a meeting if allowable under the Corporation's Certificate of Incorporation
or by vote at a meeting called for such purpose for which notice shall have been
given to the holders of the Series A Preferred Stock): (A) enter into any
agreement that would restrict the Corporation's ability to

                                       9
<Page>

perform under the Securities Purchase Agreement; (B) amend its Certificate of
Incorporation (including this resolution) or Bylaws in any way that could
adversely affect, alter or change the rights, powers or preferences of the
Series A Preferred Stock; (C) engage in any transaction that would impair or
reduce the rights, powers or preferences of the Series A Preferred Stock as a
class; (D) complete any Change of Control Transaction (PROVIDED that if less
than 400,000 shares of the Series A Preferred Stock are then outstanding (as
adjusted for stock splits, stock combinations, recapitalizations and the like)
and the then holders of Series A Preferred Stock refused to consent to such
Change of Control Transaction pursuant to this SECTION 6(e)(i), the Corporation
may, at its option, redeem all, but not less than all, of such Series A
Preferred Stock in connection with the completion of such Change of Control
Transaction at a redemption price per share equal to the Liquidation Amount, in
accordance with the procedures set forth in SECTIONS 5(c)-(e) above; but
PROVIDED FURTHER, that any such redemption shall be made subject to, and
expressly conditioned upon, the consummation of the proposed Change of Control
Transaction; or (E) change the authorized number of directors of the Board of
Directors of the Corporation, except pursuant to SECTION 6(f).

                    (ii) For so long as at least 800,000 shares of Series A
Preferred Stock remain issued and outstanding (as adjusted for stock splits,
stock combinations, recapitalizations and the like), the Corporation shall not,
without the affirmative written consent or approval of the holders of record of
shares representing 66-2/3% of the shares of Series A Preferred Stock then
outstanding, voting as a single class to the exclusion of all other classes of
the Corporation's capital stock (such consent or approval to be given by written
consent in lieu of a meeting if allowable under the Corporation's Certificate of
Incorporation or by vote at a meeting called for such purpose for which notice
shall have been given to the holders of the Series A Preferred Stock): (A)
authorize or issue any Senior Stock or Parity Stock or any securities
convertible, exercisable or exchangeable into such securities, other than (x)
Series A Preferred Stock issued upon exercise of the Series A Preferred Stock
Warrants issued pursuant to the Securities Purchase Agreement, (y) Series A
Preferred Stock issued to the Additional Purchasers (as defined in the
Securities Purchase Agreement), if any, or issued upon exercise of the Series A
Preferred Stock Warrants issued to the Additional Purchasers, if any, in
compliance with Section 2.3 of the Securities Purchase Agreement, or (z) Series
A Preferred Stock issued as payment in kind of any accrued but unpaid dividends
on the Series A Preferred Stock; (B) authorize or issue any options, rights or
warrants to purchase capital stock of the Corporation, other than Series A
Preferred Stock Warrants issued to the Additional Purchasers, if any, in
compliance with Section 2.3 of the Securities Purchase Agreement, or enter into
any agreement or amendment with respect to any outstanding options, rights or
warrants to purchase capital stock of the Corporation that reduces or that has
the effect of reducing the per share exercise price for any such options, rights
or warrants; (C) authorize or issue any debt securities of the Corporation or
any of its subsidiaries, other than debt under the existing revolving lines of
credit in effect as of the date of this resolution or the replacement thereof on
substantially similar terms, and any additional debt up to $1,000,000 in the
aggregate issued or incurred in the ordinary course of business (excluding trade
payables incurred in the ordinary course of business); (D) purchase, redeem, or
otherwise acquire any of the Corporation's capital stock, other than the
redemption of the Series A Preferred Stock pursuant to SECTION 5 or SECTION
6(e)(i)(D) hereof; (E) enter into an acquisition, sale, merger, joint venture,
consolidation or reorganization involving the Corporation or any of its
subsidiaries; (F) sell or lease assets of the Corporation or any of its
subsidiaries, except in the ordinary course of business; (G) declare or pay any
cash

                                       10
<Page>

dividends or make any distributions on any of its capital stock, other than on
the Series A Preferred Stock; (H) authorize the payment or pay to any individual
employee of the Corporation of cash compensation in excess of $500,000 per
annum; or (I) enter into any transaction (or series of transactions), including
loans, with any employee, officer or director of the Corporation or to or with
his, her or its affiliates or family members (other than with respect to payment
of compensation to actual full-time employees in the ordinary course of
business) involving $50,000 or more per year individually or $250,000 or more
per year in the aggregate.

                    (iii) For so long as at least 1,200,000 shares of Series A
Preferred Stock remain issued and outstanding (as adjusted for stock splits,
stock combinations, recapitalizations and the like), the Corporation shall not,
without the affirmative written consent or approval of the holders representing
66-2/3% of the shares of Series A Preferred Stock then outstanding, voting as a
single class to the exclusion of all other classes of the Corporation's capital
stock (such consent or approval to be given by written consent in lieu of a
meeting if allowable under the Corporation's Certificate of Incorporation or by
vote at a meeting called for such purpose for which notice shall have been given
to the holders of the Series A Preferred Stock): (A) terminate or newly appoint
the chief executive officer or president of the Corporation; (B) approve any
annual capital expense budget if such budget provides for annual capital
expenditures by the Corporation and its subsidiaries in excess of $1,000,000 in
the aggregate in any year; or (C) approve the incurrence of any single capital
expenditure (or series of related capital expenditures) in excess of $500,000;
PROVIDED, HOWEVER, the Corporation may make any reasonable emergency capital
expenditure that the Board of Directors determines is necessary to maintain the
operations of the Corporation as a result of a catastrophic event.

                    Notwithstanding any other provision in this resolution, (I)
upon the consent or approval of holders of record of shares representing at
least 75% of the shares of Series A Preferred Stock then outstanding, voting as
a single class, with respect to SECTION 6(e)(i) and at least 66 2/3% of the
shares of Series A Preferred Stock then outstanding, voting as a single class,
with respect to SECTIONS 6(e)(ii) and 6(e)(iii), and (II) with such other votes
or consents as may be required by Delaware law, the rules and regulations of the
Securities and Exchange Commission, the regulations of the American Stock
Exchange or other securities exchange applicable to the Corporation or pursuant
to the Corporation's Certificate of Incorporation, the Corporation may take any
such action referenced in this SECTION 6(e).

               (f)  VIOLATION OF SPECIAL APPROVAL RIGHTS. If the Corporation
takes any action without first obtaining the requisite approval of the holders
of record of the Series A Preferred Stock pursuant to any of the special
approval rights set forth in SECTION 6(e) (each, an "EVENT OF DEFAULT") it shall
provide notice of such violation to all holders of Series A Preferred Stock. Any
holder of Series A Preferred Stock may send written notice of any Event of
Default, whether or not the Corporation gave notice pursuant to the preceding
sentence, to the Secretary of the Corporation and demand that such Event of
Default be cured within ten (10) days of the Corporation's receipt of such
notice (or, solely in the case of the first such Event of Default, within thirty
(30) days of the Corporation's receipt of such notice). If the Corporation does
not cure such Event of Default within such ten-day or thirty-day period, as
applicable, by obtaining the required consent of holders of the Series A
Preferred Stock, then, in addition to any rights and remedies which may be
available in equity or at law to the holders of the Series A Preferred Stock,
(i) the holders of record of the shares of Series A Preferred Stock then
outstanding (in

                                       11
<Page>

addition to their rights to vote, as a single class, to elect directors pursuant
to SECTION 6(b)) shall be entitled to vote, as a single class to the exclusion
of all other classes of the Corporation's capital stock, to elect that number of
additional directors of the Board so that, when such additional number of
directors is added to the number of directors then elected to the Board of
Directors by the holders of record of the Series A Preferred Stock pursuant to
SECTION 6(b), that sum shall constitute a majority of the total number of
directors of the Corporation's Board of Directors, and (ii) in connection
therewith, the authorized number of directors of the Corporation's Board of
Directors shall be immediately and automatically increased by such number of
additional directors. The term of office of all directors so elected pursuant to
this Section 6(f) shall terminate immediately when less than 200,000 shares of
Series A Preferred Stock remain issued and outstanding (as adjusted for stock
splits, stock combinations, recapitalizations and the like). The rights granted
pursuant to this SECTION 6(f) may be exercised by written consent of the holders
of Series A Preferred Stock, at a special meeting of the holders of Series A
Preferred Stock, called as provided for in SECTION 6(c), or at any annual
meeting of stockholders held for the purpose of electing directors. If any
director elected by the holders of the Series A Preferred Stock pursuant to this
SECTION 6(f) shall cease to serve as a director before his or her term shall
have expired, any such vacancy shall be filled solely in the manner set forth in
SECTION 6(c). Any director elected by the holders of the Series A Preferred
Stock pursuant to this SECTION 6(f) may be removed during such director's term
of office solely in the manner set forth in SECTION 6(d).

          7.   CONVERSION RIGHTS.

               (a)  OPTIONAL CONVERSION OF SERIES A PREFERRED STOCK. The holder
of any shares of Series A Preferred Stock shall have the right, at such holder's
option, at any time or from time to time after sixty (60) days from the Series A
Preferred Stock Issue Date to convert any or all of such holder's shares of
Series A Preferred Stock into such number of fully paid and nonassessable shares
of Common Stock (the "CONVERSION SHARES") as determined for each share of Series
A Preferred Stock by dividing the Stated Value by the "CONVERSION PRICE" in
effect at the time of such conversion. The initial "CONVERSION PRICE" shall be
$1.00 (One Dollar). The Conversion Shares and the Conversion Price are subject
to certain adjustments as set forth herein, and the terms Conversion Shares and
Conversion Price as used herein shall as of any time be deemed to include all
such adjustments to be given effect as of such time in accordance with the terms
hereof; PROVIDED, that under no circumstances shall the Conversion Price be
reduced to a level that is less than the par value of the Common Stock.

               Upon the exercise of the option of the holder of any shares of
Series A Preferred Stock to convert Series A Preferred Stock into Common Stock,
the holder of such shares of Series A Preferred Stock to be converted shall
surrender the certificates representing the shares of Series A Preferred Stock
so to be converted in the manner provided in SECTION 7(c) hereof. Immediately
following such conversion, the rights of the holders of converted Series A
Preferred Stock (other than the right to receive dividends accrued to the date
of such conversion) shall cease and the persons entitled to receive the Common
Stock upon the conversion of Series A Preferred Stock shall be treated for all
purposes (other than the right to receive dividends accrued to the date of such
conversion) as having become the owners of such Common Stock.

                                       12
<Page>

               (b)  AUTOMATIC CONVERSION. Each share of Series A Preferred Stock
shall be automatically converted into such number of fully paid and
nonassessable shares of Common Stock as determined by dividing the Stated Value
by the Conversion Price in effect at the time of such conversion: (i) at such
time as the Closing Price exceeds $12.00 per share (as adjusted appropriately
for stock splits, stock combinations, recapitalizations and the like) for twenty
(20) consecutive trading days and the average daily trading volume for such
twenty (20) trading day period (as adjusted to exclude the highest and lowest
volume trading days during such period) exceeds 500,000 shares; or (ii) in the
event of the consummation of a firmly underwritten primary public offering of
Common Stock by the Corporation that results in aggregate gross proceeds of not
less than $35 million, at a price per share of not less than $5.00 (as adjusted
appropriately for stock splits, stock combinations, recapitalizations and the
like). All accrued but unpaid dividends shall be payable immediately prior to
conversion, either in cash or, at the option of the Corporation if such
conversion occurs prior to the third anniversary of the Series A Preferred Stock
Issue Date, in additional shares of Series A Preferred Stock.

               (c)  DELIVERY OF STOCK CERTIFICATES. The holder of any shares of
Series A Preferred Stock may exercise the optional conversion right pursuant to
SECTION 7(a) by delivering to the Corporation during regular business hours the
certificate or certificates for the shares to be converted, duly endorsed or
assigned either in blank or to the Corporation (if required by it), accompanied
by written notice stating that such holder elects to convert such shares and
shall provide a certificate to the Corporation as to the date of such
conversion. Upon the occurrence of an automatic conversion pursuant to SECTION
7(b), the Corporation shall deliver notice to each holder of Series A Preferred
Stock and each holder of any shares of Series A Preferred Stock shall deliver to
the Corporation at the office of the Corporation the certificate or certificates
for all shares of Series A Preferred Stock then held by such holder, duly
endorsed or assigned either in blank or to the Corporation (if requested by it).
Conversion shall be deemed to have been effected (i) in the case of an optional
conversion, on the date when the aforesaid delivery of stock certificates
accompanied by written notice of conversion is made if such day is a Business
Day and otherwise on the Business Day following the date of the aforesaid
delivery, and (ii) in the case of an automatic conversion pursuant to SECTION
7(b), upon the date of the event triggering the automatic conversion. In each
case, such date is referred to herein as the "CONVERSION DATE." As promptly as
practicable thereafter, the Corporation, through its transfer agent, shall issue
and deliver to or upon the written order of such holder, to the place designated
by such holder, a certificate or certificates for the number of full shares of
Common Stock to which such holder is entitled and a check or cash in respect of
any fractional interest in a share of Common Stock, as provided below; PROVIDED,
HOWEVER, that in the case of a conversion in connection with liquidation, no
such certificates need be issued. The person in whose name the certificate or
certificates for Common Stock are to be issued shall be deemed to have become
the stockholder of record in respect of such Common Stock on the applicable
Conversion Date unless the transfer books of the Corporation are closed on that
date, in which event such holder shall be deemed to have become the stockholder
of record in respect of such Common Stock on the next succeeding date on which
the transfer books are open, but the Conversion Price shall be that in effect on
the Conversion Date. Upon conversion of only a portion of the number of shares
covered by a stock certificate representing shares of Series A Preferred Stock
surrendered for conversion, the Corporation shall issue and deliver to or upon
the written order of the holder of the stock certificate so surrendered for
conversion, at the expense of the Corporation, a new stock certificate covering
the number of shares of Series A Preferred Stock representing the

                                       13
<Page>

unconverted portion of the certificate so surrendered. The Corporation shall not
be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of Common Stock or the reissuance of the
Series A Preferred Stock in a name other than that in which the shares of Series
A Preferred Stock so converted were registered, and no such issuance or delivery
shall be made unless and until the person requesting such issuance has paid to
the Corporation the amount of any such tax or has established to the
satisfaction of the Corporation that such tax, if any, has been paid.

               (d)  NO FRACTIONAL SHARES OF COMMON STOCK.

                    (i)  No fractional shares of Common Stock shall be issued
upon conversion of shares of Series A Preferred Stock and in lieu thereof, the
Corporation shall pay a cash adjustment in respect of such fractional interest
in an amount equal to the then current Market Price (as defined in SECTION
7(e)(vi) below) of a share of Common Stock multiplied by such fractional
interest. The holders of fractional interests shall not be entitled to any
rights as stockholders of the Corporation in respect of such fractional
interests. In determining the number of shares of Common Stock and the payment,
if any, in lieu of fractional shares that a holder of Series A Preferred Stock
shall receive, the total number of shares of Series A Preferred Stock
surrendered for conversion by such holder shall be aggregated.

                    (ii) On the first Dividend Payment Date on which accrued
dividends are paid in full to holders of Series A Preferred Stock following the
optional conversion pursuant to SECTION 7(a) of all or any portion of the Series
A Preferred Stock, the Corporation shall pay any dividends accrued on such
converted Series A Preferred Stock to the date of such conversion. Accrued
dividends with respect to all shares converted pursuant to SECTION 7(b) hereof
shall be paid in full on the Conversion Date out of funds legally available
therefor or, at the option of the Corporation if such conversion occurs prior to
the third anniversary of the Series A Preferred Stock Issue Date, in additional
shares of Series A Preferred Stock.

               (e)  ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF COMMON
STOCK. If and whenever after the Series A Preferred Stock Issue Date the
Corporation shall issue or sell any shares of its Common Stock for a price per
share less than, under certain circumstances (including, without limitation,
those circumstances described in paragraphs (i) through (vii) below), the
Conversion Price in effect immediately prior to the time of such issue or sale,
then immediately upon such issue or sale, the Conversion Price then in effect
shall be reduced to such lower price per share.

               For the purposes of this SECTION 7(e), the following paragraphs
(i) through (vii) shall also be applicable:

                    (i)  ISSUANCE OF RIGHTS OR OPTIONS. In case at any time
after the date hereof the Corporation shall in any manner grant (whether
directly or by assumption in a merger or otherwise, except in the circumstances
described in SECTION 7(f) below) any rights to subscribe for or to purchase, or
any options or warrants for the purchase of, Common Stock or any stock, notes or
securities convertible into or exchangeable for Common Stock (such convertible
or exchangeable stock, notes or securities being herein called "CONVERTIBLE

                                       14
<Page>

SECURITIES"), whether or not such rights, options or warrants or the right to
convert or exchange any such Convertible Securities are immediately exercisable,
such grant shall be deemed a sale by the Corporation of its Common Stock and the
price per share for such deemed sale of Common Stock shall be determined by
dividing (A) the total amount, if any, in cash or property received or
receivable by the Corporation as consideration for the granting of such rights,
options or warrants, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the exercise of such
rights, options or warrants, plus, in the case of such rights, options or
warrants that relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (B) the
total maximum number of shares of Common Stock issuable upon the exercise of
such rights, options or warrants or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such rights, options or
warrants. Except as provided in SECTION 7(e)(iii), no further 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 rights, options or warrants or
upon the actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities.

                    (ii) ISSUANCE OF CONVERTIBLE SECURITIES. In case at any time
after the date hereof the Corporation shall 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 thereunder are
immediately exercisable, such issuance or sale of Convertible Securities shall
be deemed to be a sale by the Corporation of its Common Stock and the price per
share for such Common Stock shall be determined by dividing (A) the total amount
in cash or in property 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 (B) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities; PROVIDED, HOWEVER, that (I) except as otherwise
provided in SECTION 7(e)(iii), no further adjustment of the Conversion Price
shall be made upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities, and (II) if any such issue or sale of
such Convertible Securities is made upon exercise of any rights to subscribe for
or to purchase or any option 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 7(e), no further adjustment of the
Conversion Price shall be made by reason of such issue or sale.

                    (iii) CHANGE IN OPTION PRICE OR CONVERSION PRICE. If the
purchase price provided for in any right or option referred to in SECTION
7(e)(i), the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in SECTION 7(e)(i) or
7(e)(ii), or the rate at which any Convertible Securities referred to in SECTION
7(e)(i) or 7(e)(ii) are convertible into or exchangeable for Common Stock shall
change (other than under or by reason of provisions designed to protect against
dilution), the Conversion Price then in effect hereunder shall forthwith be
readjusted (increased or decreased, as the case may be) to the Conversion Price
that would have been in effect at such time had such rights, options or
Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold. No readjustment pursuant to the
preceding sentence shall have the effect of

                                       15
<Page>

increasing the Conversion Price by an amount in excess of the amount of the
adjustment thereof originally made in respect of the issue, sale, grant or
assumption of rights, options or Convertible Securities. On the expiration of
any such option or right referred to in SECTION 7(e)(i) or the termination of
any such right to convert or exchange any such Convertible Securities referred
to in SECTION 7(e)(i) or 7(e)(ii), the Conversion Price then in effect hereunder
shall forthwith be readjusted (increased or decreased, as the case may be) to
the Conversion Price that would have been in effect at the time of such
expiration or termination had such right, option or Convertible Securities, to
the extent outstanding immediately prior to such expiration or termination,
never been granted, issued or sold. If the purchase price provided for in any
such right or option referred to in SECTION 7(e)(i) or the rate at which any
Convertible Securities referred to in SECTION 7(e)(i) or SECTION 7(e)(ii) are
convertible into or exchangeable for Common Stock shall be reduced at any time
under or by reason of provisions with respect thereto designed to protect
against dilution, then in case of the delivery of shares of Common Stock upon
the exercise of any such right or option or upon conversion or exchange of any
such Convertible Securities, the Conversion Price then in effect hereunder
shall, if not already adjusted, forthwith be adjusted to such amount as would
have obtained had such right, option or Convertible Securities never been issued
as to such shares of Common Stock and had adjustments been made upon the
issuance of the shares of Common Stock delivered as aforesaid, but only if as a
result of such adjustment the Conversion Price then in effect hereunder is
thereby reduced.

                    (iv) CONSIDERATION FOR STOCK. Anything herein to the
contrary notwithstanding, in case at any time any shares of Common Stock or
Convertible Securities or any rights, options or warrants to purchase any such
Common Stock 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 at any time any shares of Common Stock or
Convertible Securities or any rights, options or warrants to purchase any such
shares of Common Stock or Convertible Securities shall be issued or sold for a
consideration other than cash, in whole or in part, 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 reasonably and in good faith
by the Board of Directors of the Corporation, without deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the
Corporation in connection therewith. In case at any time any shares of Common
Stock or Convertible Securities or any rights, options or warrants to purchase
such shares of Common Stock or Convertible Securities shall be issued in
connection with any merger or consolidation in which the Corporation is the
surviving corporation, the amount of consideration received therefor shall be
deemed to be the fair value as determined reasonably and in good faith by the
Board of Directors of the Corporation of such portion of the assets and business
of the nonsurviving corporation as such Board may determine to be attributable
to such shares of Common Stock, Convertible Securities, rights, options or
warrants, as the case may be. In case at any time any rights, options or
warrants to purchase any shares of Common Stock or Convertible Securities shall
be issued in connection with the issue and sale of other securities of the
Corporation, together comprising one integral transaction in which no
consideration is allocated to such rights, options or warrants by the parties
thereto, such rights, options or warrants shall be deemed to have been issued
for an

                                       16
<Page>

amount of consideration equal to the fair value thereof as determined reasonably
and in good faith by the Board of Directors of the Corporation.

                    (v)  RECORD DATE. In case the Corporation shall take a
record of the holders of its Common Stock for the purpose of entitling them to
subscribe for or purchase shares of Common Stock 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 as a result of the
granting of such right of subscription or purchase.

                    (vi) DEFINITION OF MARKET PRICE. Unless otherwise set forth
in this resolution, "MARKET PRICE" shall mean the last reported sale price of
the applicable security as reported by the American Stock Exchange, the National
Association of Securities Dealers, Inc. Automatic Quotations System, or, if the
applicable security is listed or admitted for trading on another securities
exchange, the last reported sales price of the applicable security on the
principal exchange on which the applicable security is listed or admitted for
trading (which shall be for consolidated trading if applicable to such
exchange), or if neither so reported or listed or admitted for trading, the last
reported bid price of the applicable security in the over-the-counter market. In
the event that the Market Price cannot be determined as aforesaid, the Board of
Directors of the Corporation shall determine the Market Price on the basis of
such quotations as it in good faith considers appropriate, in consultation with
a nationally recognized investment bank. The Market Price shall be such price
averaged over a period of ten (10) consecutive Business Days ending two (2) days
prior to the day as of which "Market Price" is being determined.

                    (vii) ADJUSTMENT TO DETERMINATION OF CONVERSION PRICE. When
making the calculations and determinations described in this SECTION 7(e), there
shall not be taken into account (A) the issuance of Common Stock upon the
exercise of outstanding options or warrants outstanding on the Series A
Preferred Stock Issue Date, (B) the issuance of Common Stock upon conversion of
the Series A Preferred Stock, (C) the issuance of Common Stock upon exercise of
any warrants issued pursuant to the Securities Purchase Agreement, (D) the
issuance of Series A Preferred Stock upon exercise of the Series A Preferred
Stock Warrants (as defined in the Securities Purchase Agreement), (E) the
issuance of 320,868 shares of Common Stock pursuant to the Securities Purchase
Agreement, and (F) the issuance of Series A Preferred Stock to the Additional
Purchasers (as defined in the Securities Purchase Agreement), if any, the
issuance of Series A Preferred Stock Warrants to the Additional Purchasers, if
any, and the issuance of Series A Preferred Stock upon exercise of the Series A
Preferred Stock Warrants issued to the Additional Purchasers, if any, in each
case in compliance with Section 2.3 of the Securities Purchase Agreement.

               (f)  DIVIDENDS AND DISTRIBUTIONS; PURCHASE RIGHTS.

                    (i)  In case at any time after the date hereof the
Corporation shall declare a dividend or other distribution upon the shares of
Common Stock of any class payable otherwise than in shares of Common Stock or
Convertible Securities and otherwise than in the securities to which the
provisions of SECTION 7(f)(ii) hereof apply, the Corporation shall pay over to
each holder of Series A Preferred Stock, upon conversion thereof on or after the
dividend payment date, the securities and other property (including cash) that
such holder would have received

                                       17
<Page>

(together with all distributions thereon) if such holder had converted the
Series A Preferred Stock held by it on the record date fixed in connection with
such dividend, and the Corporation shall take whatever steps are necessary or
appropriate to keep in trust for the holders of the Series A Preferred Stock at
all times such securities and other property as shall be required to fulfill its
obligations hereunder in respect of the shares issuable upon the exercise or
conversion of all the Series A Preferred Stock.

                    (ii) If at any time or from time to time on or after the
Series A Preferred Stock Issue Date, the Corporation grants, issues or sells any
options or rights (other than Convertible Securities) to purchase stock,
warrants, securities or other property pro rata to the holders of Common Stock
of all classes ("PURCHASE RIGHTS"), and if the holder shall be entitled to an
adjustment pursuant to SECTION 7(e) above, then in lieu of such adjustment, each
holder of Series A Preferred Stock shall be entitled, at such holder's option,
to acquire (whether or not such holder's Series A Preferred Stock shall have
been converted), upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights that such holder could have acquired if such holder
had held the number of shares of Common Stock issuable upon conversion of such
Series A Preferred Stock immediately prior to the time or times at which the
Corporation granted, issued or sold such Purchase Rights.

               (g)  SUBDIVISION OR COMBINATION OF STOCK OR STOCK DIVIDENDS. In
case the Corporation shall at any time subdivide its outstanding shares of
Common Stock into a greater number of shares, by split or otherwise, or issue
additional shares of Common Stock as a dividend (other than a dividend in
accordance with SECTION 3 hereof), or make any other distribution upon any class
or series of stock payable in shares of Common Stock or Convertible Securities,
the Conversion Price in effect immediately prior to such subdivision shall be
proportionately reduced and, conversely, in case the outstanding shares of
Common Stock of the Corporation shall be combined into a smaller number of
shares, the Conversion Price in effect immediately prior to such combination
shall be proportionately increased.

               (h)  CHANGES IN COMMON STOCK. If any capital reorganization or
reclassification of the capital stock of the Corporation, or consolidation or
merger of the Corporation with or into another Person, or the sale, transfer or
other disposition of all or substantially all of its assets to another
corporation for cash or stock of such other corporation, shall be effected,
then, as a condition of such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition, lawful and adequate provision shall
be made whereby each holder of Series A Preferred Stock shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the shares of the Common Stock of the
Corporation immediately theretofore issuable upon conversion of the Series A
Preferred Stock, such kind and amount of shares of stock, securities (of the
Corporation or another issuer) or property or cash as may be issuable 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
issuable upon conversion of the Series A Preferred Stock had such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition not taken place, and in any such case appropriate provisions shall
be made with respect to the rights and interests of each holder of Series A
Preferred Stock to the end that the provisions hereof (including without
limitation provisions for adjustment of the Conversion Price) shall thereafter
be applicable, as nearly equivalent as may be practicable in relation to any

                                       18
<Page>

shares of stock, securities or property or cash thereafter deliverable upon the
conversion thereof. The Corporation shall not effect any such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
unless prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Corporation) resulting from such reorganization,
reclassification, consolidation or merger or the corporation purchasing or
otherwise acquiring such properties shall assume, by written instrument executed
and mailed or delivered to the holders of Series A Preferred Stock at the last
address of such holders appearing on the books of the Corporation, the
obligation to deliver to such holders such shares of stock, securities or
properties or cash as, in accordance with the foregoing provisions, such holders
may be entitled to acquire. The above provisions of this subparagraph shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, transfers or other dispositions.

               (i)  CERTAIN EVENTS. If any event occurs as to which in the
reasonable opinion of the Board of Directors of the Corporation, in good faith,
the other provisions of this SECTION 7 are not strictly applicable or if
strictly applicable would not fairly protect the conversion rights of the
holders of the Series A Preferred Stock in accordance with the essential intent
and principles of such provisions, then such Board of Directors, acting by a
vote of at least a majority of the members thereof, shall provide for the
benefit of holders of shares of Series A Preferred Stock an adjustment, if any,
on a basis consistent with such essential intent and principles, necessary to
preserve, without dilution, the rights of the holders of the Series A Preferred
Stock. Upon such vote by the Board of Directors, the Corporation shall forthwith
make the adjustments described therein; PROVIDED, HOWEVER, that no such
adjustments shall have the effect of increasing the Conversion Price as
otherwise determined pursuant to this SECTION 7 except in the event of a
combination of shares of the type contemplated in SECTION 7(g) and then in no
event to an amount larger than the Conversion Price as adjusted pursuant to
SECTION 7(g).

               (j)  PROHIBITION OF CERTAIN ACTIONS. The Corporation will not
take any action that would result in any adjustment of the Conversion Price
pursuant to the terms hereof if the total number of shares of Common Stock
issuable after such action upon conversion of all the Series A Preferred Stock
would exceed the total number of shares of Common Stock then authorized by the
Corporation's Certificate of Incorporation.

               (k)  COMMON STOCK TO BE RESERVED. The Corporation will at all
times reserve and keep available out of its authorized Common Stock, solely for
the purpose of issue upon the conversion of Series A Preferred Stock as herein
provided, such number of shares of Common Stock as shall then be issuable upon
the conversion of all outstanding Series A Preferred Stock. The Corporation
covenants that all shares of Common Stock that shall be so issuable shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable, free
from preemptive or similar rights on the part of the holders of any shares of
capital stock or securities of the Corporation, and free from all liens and
charges with respect to the issue thereof; and without limiting the generality
of the foregoing, the Corporation covenants that it will from time to time take
all such action as may be requisite to assure that the par value, if any, per
share of the Common Stock is at all times equal to or less than the then
effective Conversion Price. The Corporation will take all such action as may be
necessary to assure that such shares of Common Stock may be so issued without
violation by the Corporation of any applicable law or regulation or agreement,
or of any requirements of any domestic securities exchange upon which

                                       19
<Page>

the Series A Preferred Stock or Common Stock may be listed. Without limiting the
foregoing, the Corporation will take all such action as may be necessary to
assure that, upon conversion of any of the Series A Preferred Stock, an amount
equal to the lesser of (i) the par value of each share of Common Stock
outstanding immediately prior to such conversion, or (ii) the Conversion Price
shall be credited to the Corporation's stated capital account for each share of
Common Stock issued upon such conversion, and that, if SECTION 7(k)(i) above is
applicable, the balance of the Conversion Price of Series A Preferred Stock
converted shall be credited to the Corporation's capital surplus account. If at
any time the Corporation should not have a sufficient number of authorized
shares of Common Stock to issue upon conversion of all then outstanding shares
of Series A Preferred Stock or the shares of Series A Preferred Stock issuable
upon exercise of outstanding options, rights or warrants to purchase Series A
Preferred Stock, the Corporation covenants to take all steps necessary to amend
its Certificate of Incorporation to increase the number of shares of authorized
Common Stock to the extent necessary.

               (l)  PREFERRED STOCK TO BE RESERVED. The Corporation will at all
times reserve and keep available out of its authorized Series A Preferred Stock,
solely for the purpose of issue upon the declaration of a dividend on the
outstanding Series A Preferred Stock, such number of shares of Series A
Preferred Stock as shall then be issuable as a dividend on the Series A
Preferred Stock. The Corporation covenants that all shares of Series A Preferred
Stock that shall be issued as such dividends shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, free from preemptive
or similar rights on the part of the holders of any shares of capital stock or
securities of the Corporation, and free from all liens and charges with respect
to the issue thereof. The Corporation will take all such action as may be
necessary to assure that such shares of Series A Preferred Stock may be so
issued without violation by the Corporation of any applicable law or regulation
or agreement, or of any requirements of any domestic securities exchange upon
which the Series A Preferred Stock or the Common Stock may be listed. If at any
time the Corporation should not have a sufficient number of authorized shares of
Series A Preferred Stock to issue as dividends on the then outstanding shares of
Series A Preferred Stock, the Corporation covenants to amend this resolution to
increase the number of shares of authorized Series A Preferred Stock to the
extent necessary.

               (m)  REGISTRATION AND LISTING OF COMMON STOCK. If any shares of
Common Stock required hereunder to be reserved for purposes of conversion of
Series A Preferred Stock require registration with or approval of any
governmental authority under any Federal or state law (other than the Securities
Act) before such shares may be issued upon conversion, the Corporation will, at
its expense and as expeditiously as possible, use its best efforts to cause such
shares to be duly registered or approved, as the case may be. If and so long as
the Common Stock is listed on any national securities exchange, the Corporation
will, at its expense, obtain promptly and maintain the approval for listing on
each such exchange upon official notice of issuance, of shares of Common Stock
issuable upon conversion of the then outstanding Series A Preferred Stock and
the shares of Series A Preferred Stock then issuable upon the exercise of
options, rights or warrants to purchase Series A Preferred Stock, and maintain
the listing of such shares after their issuance; and the Corporation will also
list on such national securities exchange, will register under the Exchange Act
and will maintain such listing of, any other securities that at any time are
issuable upon conversion of the Series A Preferred Stock, if and at the time
that any securities of the same class shall be listed on such national
securities exchange by the Corporation.

                                       20
<Page>

               (n)  CLOSING OF BOOKS. The Corporation will at no time close its
transfer books against the transfer of any Series A Preferred Stock or of any
shares of Common Stock issued or issuable upon the conversion of any Series A
Preferred Stock in any manner that interferes with the timely conversion of such
Series A Preferred Stock.

               (o)  STATEMENT OF ADJUSTMENT OF CONVERSION PRICE. Whenever the
Conversion Price shall be adjusted as provided in Section 7(e), SECTION 7(g),
SECTION 7(h) or SECTION 7(i) above, the Corporation shall forthwith file at its
office a statement, signed by its independent certified public accountants,
showing in detail the facts requiring such adjustment and the Conversion Price
that shall be in effect after such adjustment. The Corporation shall also cause
a copy of such statement to be sent by certified mail, return receipt requested,
to each holder of shares of Series A Preferred Stock to such holder's address
appearing on the Corporation's records. When appropriate, such copy may be given
in advance and may be included as part of a notice required to be mailed under
the provisions of SECTION 7(p) below.

               (p)  NOTICE. In the event the Corporation shall propose to take
any action of the types described in SECTION 7(e), SECTION 7(f), SECTION 7(g) or
SECTION 7(h) above, the Corporation shall give notice to each holder of shares
of Series A Preferred Stock. The notice shall specify the record date, if any,
with respect to any such action and the date on which such action is to take
place. Such notice shall also set forth such facts with respect thereto as shall
be reasonably necessary to indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Conversion Price and
the number, kind or class of shares or other securities or property or cash that
shall be deliverable or purchasable upon the occurrence of such action or
deliverable upon conversion of shares of Series A Preferred Stock. In the case
of any action that would require the fixing of a record date, such notice shall
be given at least twenty (20) days prior to the date so fixed, and in case of
all other action, such notice shall be given at least thirty (30) days prior to
the taking of such proposed action.

               (q)  TAXES. The Corporation shall pay all documentary, stamp or
other transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Corporation upon conversion of any shares of Series A
Preferred Stock. The Corporation shall not, however, be required to pay any tax
that may be payable in respect of any transfer involved in the issuance and
delivery of Common Stock or the reissuance of the Series A Preferred Stock in a
name other than that in which the shares of Series A Preferred Stock so
converted were registered, and no such issuance or delivery shall be made unless
and until the person requesting such issuance has paid to the Corporation the
amount of any such tax or has established to the satisfaction of the Corporation
that such tax, if any, has been paid.

          8.   EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by
law, the shares of Series A Preferred Stock shall not have any voting powers,
preferences and relative, participating, optional or other special rights, other
than those specifically set forth in this resolution and in the Certificate of
Incorporation.

          9.   HEADINGS OF SUBDIVISIONS. The headings of the various
subdivisions hereof are for convenience of reference only and shall not affect
the interpretation of any of the provisions hereof.

                                       21
<Page>

          10.  REISSUANCE OF PREFERRED STOCK. Shares of Series A Preferred Stock
that have been issued and reacquired in any manner, including shares purchased
or exchanged or converted, shall (upon compliance with any applicable provisions
of the laws of Delaware) have the status of authorized but unissued shares of
preferred stock of the Corporation undesignated as to series and may be
designated or redesignated and issued or reissued, as the case may be, as part
of any series of preferred stock of the Corporation, provided that any issuance
of such shares as preferred stock must be in compliance with the terms hereof.

          11.  MUTILATED OR MISSING PREFERRED STOCK CERTIFICATES. If any of the
Series A Preferred Stock certificates shall be mutilated, lost, stolen or
destroyed, the Corporation shall issue, in exchange and in substitution for and
upon cancellation of the mutilated Series A Preferred Stock certificate, or in
lieu of and substitution for the Series A Preferred Stock certificate lost,
stolen or destroyed, a new Series A Preferred Stock certificate of like tenor
and representing an equivalent amount of shares of Series A Preferred Stock, but
only upon receipt of evidence of such loss, theft or destruction of such Series
A Preferred Stock certificate and indemnity, if requested, reasonably
satisfactory to the Corporation and the transfer agent (if other than the
Corporation), or, in the case of mutilation, upon surrender and cancellation of
such mutilated certificate.

                            [SIGNATURE PAGE FOLLOWS]

                                       22
<Page>

          IN WITNESS WHEREOF, Electric City Corp. has caused these presents to
be signed in its name and on its behalf by its Chief Executive Officer on August
30, 2001.

                                        ELECTRIC CITY CORP.

                                        By   /s/ John Mitola
                                             Name: John Mitola
                                             Title: Chief Executive Officer

                [SIGNATURE PAGE TO CERTIFICATE OF DESIGNATIONS]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00029-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00029-of-00352.parquet"}]]