EXHIBIT 3.1


                         CERTIFICATE OF INCORPORATION

                                      OF

                               BL HOLDING CORP.

                           UNDER SECTION 402 OF THE
               BUSINESS CORPORATION LAW OF THE STATE OF NEW YORK


            I,  Thomas D.  Balliett,  being a natural  person over the age of 18
years,  for the purpose of forming a corporation  pursuant to Section 402 of the
New York Business Corporation Law (the "NYBCL"), do hereby certify as follows:

                                   ARTICLE I
                                     NAME

The name of the corporation (the "Corporation") is "BL Holding Corp."

                                  ARTICLE II
                                    PURPOSE

            The  purposes for which the  Corporation  is formed are to engage in
any lawful act or activity for which  corporations  may be  organized  under the
NYBCL,  but the  Corporation  is not  formed to  engage  in any act or  activity
requiring  the  consent or approval of any state  official,  department,  board,
agency or other body without such consent or approval first being obtained.

                                  ARTICLE III
                                    OFFICE

            The  office of the  Corporation  is to be  located  in the County of
Nassau, State of New York.

                                  ARTICLE IV
                                 CAPITAL STOCK

            SECTION  1. The  aggregate  number of shares  which the  Corporation
shall have authority to issue shall be 450,000,000  shares of Common Stock,  par
value $.01 per share and 100,000,000  shares of Preferred  Stock, par value $.01
per share.


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            SECTION 2. The amount of capital stock of the  Corporation  shall be
$5,500,000.

            SECTION 3. Shares of Preferred Stock may be issued from time to time
in one or more  series  as may be  determined  from time to time by the Board of
Directors.  Except in  respect  of the  particulars  to be fixed by the Board of
Directors as provided  below,  all shares of  Preferred  Stock shall be of equal
rank.  All shares in any one series of  Preferred  Stock shall be alike in every
particular  except that shares of any one series  issued at different  times may
differ as to the dates from which  dividends  thereon shall be  cumulative.  The
voting  rights,  if any, of each such series and the  preferences  and relative,
participating,  optional  and  other  special  rights  of  each  series  and the
qualifications,  limitations and restrictions  thereof,  if any, may differ from
those of any and all  other  series.  The  Board  of  Directors  shall  have the
authority to fix by resolution  duly adopted prior to the issuance of any shares
of a particular  series of Preferred Stock designated by the Board of Directors,
the voting  rights,  if any,  of the  holders  of shares of such  series and the
designations,  preferences  and  relative,  participating,  optional  and  other
special  rights  of  each  series  and  the   qualifications,   limitations  and
restrictions thereof (the "Preferred Stock Designation").

      Without limiting the generality of the foregoing authority of the Board of
Directors, the Board of Directors from time to time may:

     a.  establish  and  designate  a series of  Preferred  Stock,  which may be
     distinguished by number,  letter or title from other Preferred Stock of the
     Corporation or any series thereof;

     b. fix and  thereafter  increase or  decrease  (but not below the number of
     shares thereof then outstanding) the number of shares that shall constitute
     such series;

      c. provide for dividends on shares of such series and if provision is made
      for  dividends,  determine  the  dividend  rate  and the  dates  on  which
      dividends, if declared,  shall be payable,  whether the dividends shall be
      cumulative  and, if  cumulative,  for what date or dates  dividends  shall
      accrue, and the other conditions, if any, including rights of priority, if
      any, upon which the dividends shall be paid;

      d.  provide as to whether the shares of such series  shall be  redeemable,
      and if redeemable, the terms, limitations and restrictions with respect to
      such redemption,  including  without  limitation,  the manner of selecting
      shares for redemption if less than all shares are to be redeemed, the time
      or times and the price or prices at which the shares of such series  shall
      be subject to redemption,  in whole or in part, and the amount, if any, in
      addition to any accrued  dividends  thereon which the holders of shares of
      any series shall be entitled to receive upon the redemption thereof, which
      amount may vary at different  redemption  dates and may be different  with
      respect  to  shares  redeemed  through  the  operation  of  any  purchase,
      retirement or sinking fund and with respect to shares otherwise redeemed;


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      e. fix the amount, in addition to any accrued dividends thereon, which the
      holders of shares of such series  shall be  entitled  to receive  upon the
      voluntary or  involuntary  liquidation,  dissolution  or winding up of the
      Corporation,  which  amount  may  vary at  different  dates  and may  vary
      depending  on  whether  such  liquidation,  dissolution  or  winding up is
      voluntary or  involuntary,  and to determine any other rights,  if any, to
      which  holders of the shares of such series shall be entitled in the event
      of any liquidation, dissolution or winding up of the Corporation;

      f.  establish  whether the shares of such  series  shall be subject to the
      operation of a purchase,  retirement or sinking fund and if so, the terms,
      limitations  and  restrictions  with respect  thereto,  including  without
      limitation,  whether such  purchase,  retirement  or sinking fund shall be
      cumulative  or  noncumulative,  the extent to and the manner in which such
      funds shall be applied to the  purchase,  retirement  or redemption of the
      shares of such series for  retirement or to other  corporate  purposes and
      the terms and provisions relative to the operation thereof;

     g. determine the extent of the voting rights, if any, of the shares of such
     series and determine whether the shares of such series having voting rights
     shall have multiple votes per share;

      h. provide  whether or not the shares of such series shall be  convertible
      into or  exchangeable  for shares of any other class or classes of capital
      stock of the Corporation,  including  Common Stock,  Preferred Stock or of
      any series  thereof,  and if  convertible or  exchangeable,  establish the
      conversion or exchange price or rate,  the  adjustments  thereof,  and the
      other  terms  and  conditions,  if any,  on  which  such  shares  shall be
      convertible or exchangeable; and

       i.  provide  for  any  other  preferences,  any  relative  participating,
      optional or other  special  rights,  any  qualifications,  limitations  or
      restrictions  thereof,  or any other term or  provision  of shares of such
      series as the Board of Directors may deem appropriate or desirable.

            Shares of Preferred  Stock may be issued by the Corporation for such
consideration as is determined by the Board of Directors.

            SECTION 4. The Common Stock shall be subject to the express terms of
the  Preferred  Stock and any series  thereof.  The  holders of shares of Common
Stock  shall be  entitled  to one vote for each such  share  upon all  proposals
presented to the  shareholders on which the holders of Common Stock are entitled
to vote. Except as otherwise provided by law or by the resolution or resolutions
adopted by the Board of Directors designating the rights, powers and preferences
of any series of  Preferred  Stock,  the Common  Stock shall have the  exclusive
right to vote for the  election of  Directors  and for all other  purposes,  and
holders of Preferred Stock shall

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not be entitled to receive notice of any meeting of  shareholders  at which they
are not entitled to vote. The number of authorized shares of Preferred Stock may
be  increased  or  decreased  (but not below the number of shares  thereof  then
outstanding)  by the  affirmative  vote  of the  holders  of a  majority  of the
outstanding  shares  of  Common  Stock,  without  a vote of the  holders  of the
Preferred Stock, or of any series thereof,  unless a vote of any such holders is
required pursuant to any Preferred Stock Designation.

            The Corporation  shall be entitled to treat the person in whose name
any share of its stock is  registered  as the owner thereof for all purposes and
shall not be bound to recognize any equitable or other claim to, or interest in,
such share on the part of any other person, whether or not the Corporation shall
have notice thereof, except as expressly provided by applicable law.

                                   ARTICLE V
                              SHAREHOLDER ACTION

            Any action required or permitted to be taken by the  shareholders of
the  Corporation  must be effected at a duly called annual or special meeting of
such holders and may not be effected by any consent in writing by such  holders.
Except as otherwise  required by law and subject to the rights of the holders of
any class or series of stock  having a  preference  over the Common  Stock as to
dividends  or  upon  liquidation,   special  meetings  of  shareholders  of  the
Corporation  for any  purpose  or  purposes  may be called  only by the Board of
Directors  pursuant to a  resolution  stating  the  purpose or purposes  thereof
approved by a majority of the total  number of Directors  which the  Corporation
would have if there  were no  vacancies  (the  "Whole  Board")  and any power of
shareholders to call a special meeting is specifically denied. No business other
than that stated in the notice shall be transacted at any special meeting.

                                  ARTICLE VI
                             ELECTION OF DIRECTORS

            Unless and except to the extent that the By-Laws of the  Corporation
shall so require,  the election of Directors of the  Corporation  need not be by
written ballot.

                                  ARTICLE VII
                              BOARD OF DIRECTORS

            SECTION 1. NUMBER,  ELECTION AND TERMS. Except as otherwise fixed by
or pursuant to the provisions of Article IV hereof relating to the rights of the
holders  of any class or series of stock  having a  preference  over the  Common
Stock as to dividends or upon  liquidation to elect  additional  Directors under
specified circumstances, the number of the Directors of the Corporation shall be
fixed  from time to time  exclusively  pursuant  to a  resolution  adopted  by a
majority of the Whole Board.  No decrease in the number of  Directors,  however,
shall shorten the term of any incumbent Director.  Directors shall be elected by
the shareholders of the Corporation

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at their annual  meeting except as herein  otherwise  provided for newly created
directorships and vacancies, to serve for one year or until their successors are
elected or chosen and qualified.

            SECTION  2.   SHAREHOLDER   NOMINATION   OF   DIRECTOR   CANDIDATES;
SHAREHOLDER PROPOSAL OF BUSINESS.  Advance notice of shareholder nominations for
the election of Directors and of the proposal of business by shareholders  shall
be given in the manner provided in the ByLaws of the Corporation, as amended and
in effect from time to time.

            SECTION 3. NEWLY  CREATED  DIRECTORSHIPS  AND  VACANCIES.  Except as
otherwise  provided for or fixed by or pursuant to the  provisions of Article IV
hereof  relating  to the  rights of the  holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation to
elect  Directors  under  specified  circumstances,  newly created  directorships
resulting  from any increase in the number of Directors and any vacancies on the
Board of Directors resulting from death, resignation,  disqualification, removal
or other  cause  shall be filled by the  affirmative  vote of a majority  of the
remaining  Directors then in office, even though less than a quorum of the Board
of Directors,  and not by the  shareholders.  Any Director elected in accordance
with  the  preceding  sentence  shall  hold  office  for the  remainder  of such
unexpired term or until such  Director's  successor shall have been duly elected
and qualified.  No decrease in the number of Directors constituting the Board of
Directors shall shorten the term of any incumbent Director.

            SECTION 4. REMOVAL.  Subject to the rights of any class or series of
stock  having  a  preference  over the  Common  Stock  as to  dividends  or upon
liquidation to elect Directors under specified  circumstances,  any Director may
be removed from office only for cause by the affirmative  vote of the holders of
at least a  majority  of the  voting  power  of all  shares  of the  Corporation
entitled to vote  generally in the election of  Directors  (the "Voting  Stock")
then outstanding, voting together as a single class.

            SECTION  5.  AMENDMENT,   REPEAL,  ETC.   Notwithstanding   anything
contained in this Certificate of Incorporation to the contrary,  the affirmative
vote of the holders of at least 80% of the voting power of all Voting Stock then
outstanding,  voting  together  as a single  class,  shall be required to alter,
amend, adopt any provision inconsistent with or repeal this Article VII.

                                 ARTICLE VIII
                                    BY-LAWS

            The  By-Laws  may be  altered or  repealed  and new  By-Laws  may be
adopted (1) at any annual or special meeting of shareholders, by the affirmative
vote of the  holders of a majority of the voting  power of the stock  issued and
outstanding and entitled to vote thereat,  provided,  however, that any proposed
alteration  or repeal  of, or the  adoption  of any  By-Law  inconsistent  with,
Section  2.2,  2.7 or 2.10 of Article II of the  By-Laws or with  Section 3.9 or
3.11 of Article  III of the  By-Laws,  by the  shareholders  shall  require  the
affirmative vote of the holders of at least

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80% of the voting power of all Voting Stock then outstanding, voting together as
a single class;  and provided,  further,  however,  that in the case of any such
shareholder action at a special meeting of shareholders,  notice of the proposed
alteration, repeal or adoption of the new By-Law or By-Laws must be contained in
the notice of such special meeting, or (2) by the affirmative vote of a majority
of the Whole Board;  provided that any proposed  alteration or repeal of, or the
adoption of any By-Law  inconsistent with, Section 4.9 or 4.11 of the Article IV
of the By-Laws by the Board of Directors shall require the vote of two-thirds of
the Whole Board.

                                  ARTICLE IX
                   AMENDMENT OF CERTIFICATE OF INCORPORATION

            The Corporation  reserves the right at any time from time to time to
amend,  alter,  change or repeal any provision  contained in this Certificate of
Incorporation,  and any other provisions  authorized by the laws of the State of
New York at the time in force may be added or  inserted,  in the  manner  now or
hereafter  prescribed by law;  and,  except as set forth in Articles XIV and XV,
all rights,  preferences  and  privileges of whatsoever  nature  conferred  upon
shareholders,  Directors or any other persons whomsoever by and pursuant to this
Certificate  of  Incorporation  in its present form or as hereafter  amended are
granted subject to the right reserved in this Article.  Notwithstanding anything
contained in this Certificate of Incorporation to the contrary,  the affirmative
vote of the holders of at least 80% of the Voting Stock then outstanding, voting
together  as a single  class,  shall be  required  to  alter,  amend,  adopt any
provision inconsistent with or repeal Article V, VII, VIII or this sentence.

                                   ARTICLE X
                         AGENT FOR SERVICE OF PROCESS

            The  Secretary  of State of the State of New York is  designated  as
agent of the  Corporation  upon whom  process  against  the  Corporation  may be
served.  The post office  address to which the  Secretary  of State shall mail a
copy of any  process  against  the  Corporation  served  upon  him  is:  c/o C T
Corporation System, 1633 Broadway, New York, New York 10019.

                                  ARTICLE XI
                               REGISTERED AGENT

            The name and  address  of the  registered  agent  which is to be the
agent of the  corporation  upon whom  process  against it may be  served,  is CT
Corporation System, 1633 Broadway, New York, New York 10019.


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                                  ARTICLE XII
                                   DURATION

            The duration of the Corporation shall be perpetual.

                                 ARTICLE XIII
                             NO PREEMPTIVE RIGHTS

            The holders of equity  shares and the  holders of voting  shares (as
each term is defined in Section 622 of the NYBCL) of the  Corporation  shall not
have any preemptive rights.

                                  ARTICLE XIV
                      LIMITED LIABILITY; INDEMNIFICATION

            SECTION 1. Each  person who was or is made a party or is  threatened
to be made a party to or is  involved  in any  action,  suit or  proceeding,  or
appeal  thereof,  whether  civil,  criminal,   administrative  or  investigative
(hereinafter a "proceeding"),  by reason of the fact that he or she, or a person
of whom he or she is the legal  representative,  is or was a Director or officer
of the  Corporation or is or was serving at the request of the  Corporation as a
Director, officer, employee or agent of another corporation or of a partnership,
joint  venture,  trust or other  enterprise,  including  service with respect to
employee  benefit plans,  whether the basis of such proceeding is alleged action
in an  official  capacity as a  Director,  officer,  employee or agent or in any
other capacity while serving as a Director, officer, employee or agent, shall be
indemnified  and  held  harmless  by  the  Corporation  to  the  fullest  extent
authorized by the NYBCL, as the same exists or may hereafter be amended (but, in
the case of any such amendment,  only to the extent that such amendment  permits
the  Corporation  to  provide  broader  indemnification  rights  than  said  law
permitted  the  Corporation  to provide  prior to such  amendment),  against all
expense, liability and loss (including, but not limited to, all attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in  settlement)  reasonably  incurred or  suffered by such person in  connection
therewith and such indemnification  shall continue as to a person who has ceased
to be a Director,  officer,  employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators;  PROVIDED, HOWEVER, that, except
as provided in Section 2 of this Article XIV, the  Corporation  shall  indemnify
any such person seeking indemnification in connection with a proceeding (or part
thereof)  initiated by such person only if such proceeding (or part thereof) was
authorized  by  the  Board  of  Directors  of  the  Corporation.  The  right  to
indemnification  conferred in this Section 1 shall be a contract right and shall
include the right to be paid by the Corporation the expenses (including, without
limitation,  attorneys'  fees)  incurred in  defending  any such  proceeding  in
advance  of its  final  disposition;  PROVIDED,  HOWEVER,  that,  if  the  NYBCL
requires,  the payment of such expenses incurred by a Director or officer in his
or her capacity as a Director or officer (and not in any other capacity in which
service  was or is  rendered  by  such  person  while  a  Director  or  officer,
including,  without limitation,  service to an employee benefit plan) in advance
of the final disposition of a proceeding shall be made only upon delivery

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to the  Corporation  of an  undertaking,  by or on  behalf of such  Director  or
officer,  to repay all amounts so advanced if it shall  ultimately be determined
that such  Director  or officer is not  entitled  to be  indemnified  under this
Article  XIV or  otherwise.  The  Corporation  may,  by  action  of its Board of
Directors,  provide  indemnification  to employees and agents of the Corporation
with the same scope and effect as the foregoing indemnification of Directors and
officers,  or on such other terms and  conditions  as the Board of Directors may
deem necessary or desirable.

            SECTION 2. If a claim  under  Section 1 of this  Article  XIV is not
paid in full by the  Corporation  within  thirty days after a written  claim has
been received by the Corporation,  the claimant may at any time thereafter bring
suit against the  Corporation  to recover the unpaid amount of the claim and, if
successful in whole or in part,  the claimant  shall be entitled to be paid also
the expense (including, without limitation, attorneys' fees) of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses  incurred in defending any proceeding in advance of
its final disposition where the required  undertaking,  if any is required,  has
been tendered to the Corporation) that the claimant has not met the standards of
conduct  which make it  permissible  under the NYBCL for the  Corporation  to in
demnify the  claimant  for the amount  claimed,  but the burden of proving  such
defense  shall be on the  Corporation.  Neither the  failure of the  Corporation
(including  its  Board of  Directors,  or any part  thereof,  independent  legal
counsel,  or its  shareholders)  to  have  made  a  determination  prior  to the
commencement  of such action that  indemnification  of the claimant is proper in
the circumstances  because he or she has met the applicable  standard of conduct
set  forth  in  the  NYBCL,  nor an  actual  determination  by  the  Corporation
(including  its  Board of  Directors,  or any part  thereof,  independent  legal
counsel,  or its  shareholders)  that the claimant  has not met such  applicable
standard  of conduct,  shall be a defense to the action or create a  presumption
that the claimant has not met the applicable standard of conduct.

            SECTION 3. The right to indemnification  and the payment of expenses
incurred in defending a proceeding in advance of its final disposition conferred
in this  Article XIV shall not be  exclusive of any other right which any person
may have or hereafter acquire under any statute, provision of the Certificate of
Incorporation,   By-Law,   agreement,  vote  of  shareholders  or  disinterested
Directors or otherwise.

            SECTION 4. The Corporation may maintain  insurance,  at its expense,
to  protect  itself  and  any  Director,  officer,  employee  or  agent  of  the
Corporation or another corporation,  partnership,  joint venture, trust or other
enterprise against any expense, liability or loss, to the fullest extent allowed
by law,  whether or not the  Corporation  would have the power to indemnify such
person against such expense, liability or loss under the NYBCL.

          ARTICLE XV DIRECTOR LIABILITY

     A  Director  of the  Corporation  shall  not be  personally  liable  to the
Corporation or

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its shareholders for damages for any breach of duty in such capacity except that
the  liability of a Director  shall not be so limited if (1) a judgment or other
final  adjudication  adverse to him estab lishes that his acts or omissions were
in bad faith or involved intentional misconduct or a knowing violation of law or
that he personally gained in fact a financial profit or other advantage to which
he was not legally  entitled or that his acts violated Section 719 of the NYBCL,
or (2) his acts or omissions  occurred prior to the adoption of this  provision.
No  amendment  to or repeal of this Article XV shall apply to or have any effect
on the liability or alleged  liability of any Director of the Corporation for or
with respect to any acts or omissions of such Director  occurring  prior to such
amendment  or repeal.  If the NYBCL is amended  hereafter to expand or limit the
liability of a director,  then the  liability  of a Director of the  Corporation
shall be expanded to the extent  required or limited to the extent  permitted by
the NYBCL, as so amended.

            IN  WITNESS   WHEREOF,   I  have   executed  this   Certificate   of
Incorporation this 15th day of April, 1998.



                                                /S/ THOMAS D. BALLIETT
                                                ----------------------
                                                Thomas D. Balliett, Esq.
                                                  Incorporator
                                                919 Third Avenue
                                                New York, NY  10022



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                                ACKNOWLEDGEMENT


STATE OF NEW YORK,  )
                    ) ss.:
COUNTY OF NEW YORK, )


            On this 15 day of April,  1998,  personally came before me Thomas D.
Balliett,  a person  known to me to be the person  who  executed  the  foregoing
Certificate  of   Incorporation,   and  he  acknowledged  that  he  signed  said
Certificate of Incorporation and acknowledged the same as his free act and deed.

            Given under my hand and seal the day and year first above written.


                               /s/ Judi Wasserman
                               ------------------
                                  Notary Public






[seal]

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                           CERTIFICATE OF AMENDMENT

                                    OF THE

                         CERTIFICATE OF INCORPORATION

                                      OF

                               BL HOLDING CORP.


              Under Section 805 of the Business Corporation Law
                           of the State of New York

                                  -----------

      BL Holding Corp.,  a corporation  organized and existing under the laws of
the State of New York (the "Corporation"), does hereby certify as follows:

            FIRST:  The name of the Corporation is BL Holding Corp.

          SECOND:  The certificate of incorporation of the Corporation was filed
by the New York Department of State on April 16, 1998.

            THIRD:  The certificate of incorporation is hereby amended to change
the name of the  Corporation  and to change the par value of the Preferred Stock
of the Corporation, each as authorized by the New York Business Corporation Law,
to wit:

            Article I relating to the name of the Corporation is amended to read
      in its entirety as follows:

                                  "ARTICLE I
                                     NAME

            "The name of the corporation shall be: MarketSpan Corporation."



<PAGE>



            Sections 1 and 2 of Article IV relating to the capital  stock of the
      Corporation are amended to read in their entirety as follows:

                  "SECTION  1.  The   aggregate   number  of  shares  which  the
            Corporation   shall  have  the  authority  to  issue  shall  be  (i)
            450,000,000  shares of Common Stock, par value $.01 per share,  (ii)
            16,000,000 shares of Preferred Stock, par value $25 per share, (iii)
            1,000,000  shares of Preferred  Stock,  par value $100 per share and
            (iv) 83,000,000 shares of Preferred Stock, par value $.01 per share.

                  SECTION 2.  The amount of capital stock of the Corporation
            shall be $505,330,000."

            FOURTH: The foregoing amendments to the certificate of incorporation
were duly  adopted by a Unanimous  Written  Consent of the Board of Directors of
the  Corporation and by a Unanimous  Written Consent of the  shareholders of the
Corporation, in accordance with Section 803 of the New York Business Corporation
Law.


<PAGE>


            IN WITNESS WHEREOF, the undersigned officers of the Corporation have
signed this  Certificate of Amendment and each affirms that the statements  made
herein are true under the penalties of perjury.

Dated:  May 21, 1998

                                    BL HOLDING CORP.



                                    By: /s/ William J. Catacosinos
                                    ------------------------------
                                    Name:   Dr. William J. Catacosinos
                                    Title:  Chief Executive Officer


                                    By: /s/ Kathleen Marion
                                    -----------------------
                                    Name:   Kathleen Marion
                                    Title:  Secretary


<PAGE>


                            CERTIFICATE OF AMENDMENT

                                     OF THE

                          CERTIFICATE OF INCORPORATION

                                       OF

                             MARKETSPAN CORPORATION


                Under Section 805 of the Business Corporation Law
                           of the State of New York

                                   -----------

      MarketSpan  Corporation,  a corporation  organized and existing  under the
laws of the  State of New York  (the  "Corporation"),  does  hereby  certify  as
follows:

     FIRST: The present name of the Corporation is MarketSpan  Corporation.  The
Corporation was formed under the name "BL Holding Corp."

      SECOND: The Certificate of Incorporation of the Corporation was filed with
the New York  Department of State on April 16, 1998. A Certificate  of Amendment
of the  Certificate of  Incorporation  was filed with the New York Department of
State on May 26, 1998.

     THIRD: The amendment of the Certificate of Incorporation of the Corporation
effected by this Certificate of Amendment is as follows:

      To add  provisions  stating  the  number,  designation,  relative  rights,
      preferences,   and  limitations  of  the  shares  of  the  Series  A  ESOP
      Convertible Preferred Stock, Series AA Preferred Stock, Series B Preferred
      Stock and Series C Preferred  Stock, as fixed by the Board of Directors of
      the Corporation.

     FOURTH:  To  accomplish  the  foregoing   amendment,   Article  IV  of  the
Certificate of Incorporation  of the Corporation,  relating to the capital stock
of the Corporation is hereby amended as follows:

      A Section 5 shall be  inserted  at the end of such  Article  IV,  and such
      Section 5 shall read in its entirety as follows:



<PAGE>




"SECTION 5. The designations, and relative, distribution,  dividend, liquidation
and other rights,  preferences and limitations of each series of Preferred Stock
are as follows:


PART A.           SERIES A ESOP CONVERTIBLE PREFERRED STOCK

1.    Designation and Issuance

      (A) One hundred  thousand  (100,000)  shares of Preferred Stock are hereby
designated as Series A ESOP Convertible Preferred Stock (hereinafter referred to
as  "Series A  Preferred  Stock").  Such  number of shares may be  increased  or
decreased by resolution of the Board of  Directors,  but no such decrease  shall
reduce the number of shares of Series A  Preferred  Stock to a number  less than
that of the shares  then  outstanding  plus the number of shares  issuable  upon
exercise of any rights,  options or warrants or upon  conversion of  outstanding
securities  issued by the  Corporation.  All shares of Series A Preferred  Stock
redeemed or purchased by the Corporation  shall be retired and shall be restored
to the status of authorized but unissued shares of Preferred Stock.

      (B) Shares of Series A  Preferred  Stock shall be issued only to a trustee
or trustees  acting on behalf of an employee  benefit plan of the Corporation or
any  subsidiary  or  affiliated  entity  (a  "Plan").  In the event of any sale,
transfer  or other  disposition  (hereinafter  for  purposes  of this  Part A, a
"transfer")  of shares of Series A Preferred  Stock to any person other than any
trustee  or  trustees  of any Plan,  the shares of Series A  Preferred  Stock so
transferred,   upon  such  transfer  and  without  any  further  action  by  the
Corporation  or the  holder,  shall be  automatically  converted  into shares of
Common Stock at the Conversion  Price (as hereinafter  defined) and on the terms
otherwise provided for the conversion of shares of Series A Preferred Stock into
shares of  Common  Stock  pursuant  to  Subsection  5 of this Part A and no such
transferee  shall  have any of the  voting  powers,  preferences  and  relative,
participating,  optional  or  special  rights  ascribed  to  shares  of Series A
Preferred Stock hereunder but, rather,  only the powers and rights pertaining to
the Common Stock into which such shares of Series A Preferred  Stock shall be so
converted.  In the event of such a conversion,  such transferee shall be treated
for all  purposes as the record  holder of the shares of Common Stock into which
the Series A Preferred  Stock shall have been  converted  as of the date of such
conversion.  Certificates  representing shares of Series A Preferred Stock shall
be  legended to reflect  such  restrictions  on  transfer.  Notwithstanding  the
foregoing  provisions of this  Subsection 1, shares of Series A Preferred  Stock
(i) may be converted  into shares of Common Stock as provided by Subsection 5 of
this Part A and the shares of Common  Stock issued upon such  conversion  may be
transferred  by the  holder  thereof  as  permitted  by law and  (ii)  shall  be
redeemable  by the  Corporation  upon  the  terms  and  conditions  provided  by
Subsections 6, 7 and 8 of this Part A.

2.    Dividends and Distributions

      (A)(1) Subject to the provisions for adjustment  hereinafter  set forth in
this Part A, the holders of shares of Series A Preferred Stock shall be entitled
to receive,  when and as declared by the Board of Directors out of funds legally
available therefor, cash dividends ("Regular


<PAGE>




Preferred  Dividends") in an amount per share initially equal to $6.00 per share
per annum, subject to adjustment from time to time as hereinafter provided,  and
no more,  except as  provided in  paragraph  (A)(2) of this  Subsection  2 (such
amount,  as  adjusted  from time to time,  being  hereinafter  referred  to, for
purposes of this Part A, as the  "Regular  Preferred  Dividend  Rate"),  payable
semiannually  in arrears,  one-half on March 1, and  one-half on  September 1 of
each year (each a "Series A Dividend  Payment Date")  commencing on September 1,
1998,  to holders of record at the start of  business  on such Series A Dividend
Payment Date.  Regular Preferred  Dividends shall begin to accrue on outstanding
shares of Series A  Preferred  Stock from the date of issuance of such shares of
Series A Preferred Stock.  Regular  Preferred  Dividends shall accrue on a daily
basis,  based on the  Regular  Preferred  Dividend  Rate in effect on such date,
whether  or not the  Corporation  shall  have  earnings  or surplus at the time,
computed on the basis of a 360-day  year of 30-day  months in case of any period
less  than a full  semiannual  period.  Accrued  but  unpaid  Regular  Preferred
Dividends shall cumulate as of the Series A Dividend  Payment Date on which they
first become  payable,  but no interest shall accrue on  accumulated  but unpaid
Regular Preferred Dividends.

      (2) In the event  that for any  period  of six (6)  months  preceding  any
Series A Dividend  Payment Date the aggregate  fair value (as  determined by the
Board of Directors) of all dividends and other distributions  declared per share
of Common Stock during such six month period  multiplied by the number of shares
of Common Stock into which a share of Series A Preferred  Stock was  convertible
on the appropriate  dividend  payment date for the Common Stock shall exceed the
amount  of the  Regular  Preferred  Dividends  accrued  on a share  of  Series A
Preferred  Stock  during  such six month  period,  the  holders of shares of the
Series A Preferred  Stock shall be entitled to receive,  when and as declared by
the Board of Directors out of funds legally available therefore,  cash dividends
(the  "Supplemental   Preferred   Dividends")  in  an  amount  per  share  (with
appropriate  adjustments  to reflect any stock split or combination of shares or
other  adjustment  provided  for in  Subsection  9 of this  Part A) equal to the
amount of such  excess up to but not  exceeding  (x) the  product of two percent
(2%)  times the  average  of the Fair  Market  Values of the number of shares of
Common Stock into which a share of Series A Preferred  Stock was  convertible on
the day next  preceding  the  ex-dividend  date for each such  dividend  and the
distribution  date  for  each  such  distribution  on the  Common  Stock  of the
Corporation  minus (y) such amount of accrued Regular Preferred  Dividends.  The
calculation  of  each  Supplemental  Preferred  Dividend  shall  be  subject  to
adjustment  corresponding  to the  adjustments  provided in Subsection 9 of this
Part A.  Supplemental  Preferred  Dividends  shall accrue and cumulate as of the
close of each  relevant  six month  period  and shall be payable on the Series A
Dividend Payment Date next following the close of any such six month period, but
no  interest  shall  accrue on  accumulated  but unpaid  Supplemental  Preferred
Dividends and no Supplemental Preferred Dividends shall accrue in respect of any
period of less than six months.

      (B)(1)  No full  dividends  shall be  declared  or paid or set  apart  for
payment on any shares  ranking,  as to dividends,  on a parity with or junior to
the Series A Preferred  Stock,  for any period unless full cumulative  dividends
(which for all  purposes of this  resolution  shall  include  Regular  Preferred
Dividends and Supplemental  Preferred  Dividends) have been or contemporaneously
are declared and paid or declared and a sum sufficient  for the payment  thereof
set apart for such  payment  on the  Series A  Preferred  Stock for all Series A
Dividend Payment Dates occurring on


<PAGE>




or prior to the date of payment of such full  dividends.  When dividends are not
paid in full, as aforesaid,  upon the shares of Series A Preferred Stock and any
other  shares  ranking,  as to  dividends,  on a parity  with Series A Preferred
Stock,  all dividends  declared upon shares of Series A Preferred Stock shall be
declared pro rata so that the amount of dividends declared per share on Series A
Preferred  Stock and such other  parity  shares  shall in all cases bear to each
other the same  ratio  that  accumulated  dividends  per share on the  shares of
Series A Preferred Stock and such other parity shares bear to each other. Except
as  otherwise  provided  herein,  holders of shares of Series A Preferred  Stock
shall not be entitled to any  dividends,  whether  payable in cash,  property or
shares, in excess of full cumulative dividends,  as herein provided, on Series A
Preferred Stock.

      (B)(2) So long as any shares of Series A Preferred Stock are  outstanding,
no  dividend  (other  than  dividends  or  distributions  paid in shares  of, or
options, warrants or rights to subscribe for or purchase shares of, Common Stock
or other shares ranking  junior to Series A Preferred  Stock as to dividends and
upon  liquidation  and  other  than as  provided  in  paragraph  (B)(1)  of this
Subsection  2) shall be  declared  or paid or set  aside  for  payment  or other
distribution  declared  or made upon the Common  Stock or upon any other  shares
ranking  junior to or on a parity with Series A Preferred  Stock as to dividends
or upon  liquidation,  nor shall  any  Common  Stock or any other  shares of the
Corporation ranking junior to or on a parity with Series A Preferred Stock as to
dividends or upon liquidation be redeemed,  purchased or otherwise  acquired for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any such shares) by the Corporation  (except by conversion
into or  exchange  for  shares  of the  Corporation  ranking  junior to Series A
Preferred Stock as to dividends and upon liquidation)  unless, in each case, the
full cumulative  dividends on all outstanding shares of Series A Preferred Stock
shall have been paid.

      (3) Any dividend  payment made on shares of Series A Preferred Stock shall
first be credited against the earliest  accumulated but unpaid dividend due with
respect to shares of Series A Preferred Stock.

3.    Liquidation Preference

      (A) In the event of any  dissolution or  liquidation  of the  Corporation,
whether  voluntary or  involuntary,  before any payment or  distribution  of the
assets of the Corporation  (whether  capital or surplus) shall be made to or set
apart  for the  holders  of any  series  or  class  or  classes  of stock of the
corporation  ranking  junior to Series A  Preferred  Stock upon  dissolution  or
liquidation,  the  holders of Series A  Preferred  Stock  shall be  entitled  to
receive the Liquidation  Price (as  hereinafter  defined) per share in effect at
the time of  dissolution or  liquidation,  plus an amount equal to all dividends
accrued  (whether or not  accumulated)  and unpaid  thereon to the date of final
distribution  to such  holders;  but such  holders  shall not be entitled to any
further  payments.  The  Liquidation  Price per share which  holders of Series A
Preferred Stock shall receive upon dissolution or liquidation  shall be equal to
$100, subject to adjustment as hereinafter provided in this Part A. If, upon any
dissolution or liquidation of the Corporation, the assets of the Corporation, or
proceeds  thereof,  distributable  among the holders of Series A Preferred Stock
shall be  insufficient  to pay in full the  preferential  amount  aforesaid  and
liquidating   payments  on  any  other  shares  ranking  as  to  dissolution  or
liquidation, on a parity with Series A Preferred Stock, then such


<PAGE>




assets,  or the  proceeds  thereof,  shall be  distributed  among the holders of
Series A Preferred  Stock and any such other shares  ratably in accordance  with
the  respective  amounts  which  would be  payable  on such  shares  of Series A
Preferred  Stock and any such other shares if all amounts  payable  thereon were
paid in full. For the purposes of this Subsection 3, a  consolidation  or merger
of the  Corporation  with one or more  corporations  shall not be deemed to be a
dissolution or liquidation, voluntary or involuntary.

      (B)  Subject to the rights of the holders of shares of any series or class
or classes  of stock  ranking  on a parity  with or prior to Series A  Preferred
Stock,  upon any  dissolution or liquidation of the  Corporation,  after payment
shall  have been made in full to the  holders  of  Series A  Preferred  Stock as
provided in this Subsection 3, but not prior thereto,  any other series or class
or classes of stock ranking junior to Series A Preferred Stock upon  dissolution
or liquidation  shall,  subject to the respective  terms and provisions (if any)
applying thereto, be entitled to receive any and all assets remaining to be paid
or  distributed,  and the  holders  of  Series A  Preferred  Stock  shall not be
entitled to share therein.

4.    Ranking and Voting of Shares

      (A) Any shares of the Corporation shall be deemed to rank:

       (1) on a parity with Series A Preferred  Stock as to  dividends  or as to
distribution  of assets  upon  dissolution  or  liquidation,  whether or not the
dividend rates,  dividend payment dates, or redemption or liquidation prices per
share  thereof be  different  from  those of Series A  Preferred  Stock,  if the
holders of such class of stock and Series A Preferred Stock shall be entitled to
the  receipt  of  dividends  or of amounts  distributable  upon  dissolution  or
liquidation,  as the case may be, in proportion to their respective  dividend or
liquidation amounts, as the case may be, without preference or priority one over
the other, and

      (2)  junior  to  Series A  Preferred  Stock as to  dividends  or as to the
distribution of assets upon dissolution or liquidation,  if such shares shall be
Common Stock or if the holders of Series A Preferred  Stock shall be entitled to
receipt  of  dividends  or  of  amounts   distributable   upon   dissolution  or
liquidation,  as the case may be, in  preference  or  priority to the holders of
such shares.

       (B) The  holders  of shares of Series A  Preferred  Stock  shall have the
following voting rights:

      (1) Except as otherwise  required by law or set forth  herein,  holders of
Series A Preferred  Stock shall have no special  voting rights and their consent
shall not be  required  (except to the  extent  they are  entitled  to vote with
holders of Common  Stock as set forth  herein)  for the taking of any  corporate
action,  including  the  issuance  of  any  preferred  stock  now  or  hereafter
authorized;  PROVIDED,  HOWEVER,  that  the  vote  of at  least  66-2/3%  of the
outstanding  shares of Series A Preferred Stock,  voting separately as a series,
shall be  necessary  to  approve  any  alteration,  amendment  or  repeal of any
provision of the Certificate of  Incorporation  or any alteration,  amendment or
repeal of any provision of the Certificate of Incorporation relating to the


<PAGE>




designation,  preferences and rights of Series A Preferred Stock  (including any
such alteration,  amendment or repeal effected by any merger or consolidation in
which the  Corporation  is the  surviving  or  resulting  corporation),  if such
amendment,  alteration or repeal would alter or change the powers,  preferences,
or  special  rights  of the  Series  A  Preferred  Stock  so as to  affect  them
adversely.

5.    Conversion into Common Stock

      (A) Holders of shares of Series A Preferred  Stock shall be  entitled,  at
any time prior to the close of business on the date fixed for redemption of such
shares pursuant to Subsections 6, 7, or 8 of this Part A, to cause any or all of
such shares to be converted into shares of Common Stock. The number of shares of
Common  Stock  into which  each  share of the  Series A  Preferred  Stock may be
converted shall be determined by dividing the Liquidation Price in effect at the
time of conversion by the Conversion Price (as hereinafter defined) in effect at
the time of conversion. The Conversion Price per share at which shares of Common
Stock  shall be  issuable  upon  conversion  of any shares of Series A Preferred
Stock shall be 115% of the Current Market Price of the Common Stock on the first
day on which the Common  Stock is  publicly  traded,  subject to  adjustment  as
hereinafter provided in this Part A.

      (B) Any holder of shares of Series A Preferred  Stock  desiring to convert
such shares into shares of Common Stock shall surrender,  if  certificated,  the
certificate or certificates  representing the shares of Series A Preferred Stock
being  converted,  duly assigned or endorsed for transfer to the Corporation (or
accompanied   by  duly  executed   stock  powers   relating   thereto),   or  if
uncertificated,  a duly executed stock power relating thereto,  at the principal
executive office of the Corporation or the offices of the transfer agent for the
Series A  Preferred  Stock or such office or offices in the  continental  United
States of an agent for  conversion  as may from  time to time be  designated  by
notice to the holders of the Series A Preferred  Stock by the Corporation or the
transfer agent for the Series A Preferred  Stock,  accompanied by written notice
of conversion.  Such notice of conversion shall specify (i) the number of shares
of Series A Preferred  Stock to be converted and the name or names in which such
holder wishes the Common Stock and any shares of Series A Preferred Stock not to
be so converted to be issued,  and (ii) the address to which such holder  wishes
delivery to be made of a confirmation of such conversion, if uncertificated,  or
any new certificates which may be issued upon such conversion if certificated.

      (C) Upon surrender, if certificated, of a certificate representing a share
or shares of Series A Preferred Stock for conversion, or if uncertificated, of a
duly executed stock power relating thereto, the Corporation shall issue and send
by hand  delivery  (with  receipt to be  acknowledged)  or by first  class mail,
postage  prepaid,  to the holder  thereof or to such holder's  designee,  at the
address   designated  by  such  holder,   if  certificated,   a  certificate  or
certificates for, or if uncertificated, confirmation of, the number of shares of
Common  Stock to which such holder  shall be entitled  upon  conversion.  In the
event that there shall have been surrendered shares of Series A Preferred Stock,
only part of which are to be converted,  the Corporation shall issue and deliver
to such holder or such holder's designee, if certificated,  a new certificate or
certificates representing the number of shares of Series A Preferred Stock which
shall not have been


<PAGE>




converted, or if uncertificated,  confirmation of the number of shares of Series
A Preferred Stock which shall not have been converted.

      (D) The  issuance  by the  Corporation  of shares of Common  Stock  upon a
conversion  of shares of Series A Preferred  Stock into  shares of Common  Stock
made at the option of the holder thereof shall be effective as of the earlier of
(i) the delivery to such holder or such  holder's  designee of the  certificates
representing  the  shares of Common  Stock  issued  upon  conversion  thereof if
certificated  or  confirmation  if  uncertificated  or (ii) the  commencement of
business on the second  business day after the surrender of the  certificate  or
certificates,   if   certificated,   or  a  duly   executed   stock  power,   if
uncertificated,  for the shares of Series A Preferred Stock to be converted.  On
and after the effective  date of conversion,  the person or persons  entitled to
receive  Common Stock  issuable  upon such  conversion  shall be treated for all
purposes as the record holder or holders of such shares of Common Stock,  but no
allowance or adjustment shall be made in respect of dividends payable to holders
of  Common  Stock of  record  on any  date  prior to such  effective  date.  The
Corporation  shall not be obligated to pay any  dividends  which shall have been
declared  and shall be payable to holders of shares of Series A Preferred  Stock
on a Series A Dividend  Payment Date if such Series A Dividend  Payment Date for
such dividend  shall be on or subsequent to the effective  date of conversion of
such shares.

      (E) The Corporation shall not be obligated to deliver to holders of Series
A Preferred  Stock any fractional  share or shares of Common Stock issuable upon
any conversion of such shares of Series A Preferred  Stock,  but in lieu thereof
may make a cash payment in respect thereof in any manner permitted by law.

      (F) The  Corporation  shall at all times reserve and keep available out of
its authorized and unissued  Common Stock or treasury  Common Stock,  solely for
issuance  upon the  conversion  of shares of Series A Preferred  Stock as herein
provided,  such  number of shares of Common  Stock as shall from time to time be
issuable upon the conversion of all the shares of Series A Preferred  Stock then
outstanding.

6.    Redemption at the Option of the Corporation

      (A) The Series A Preferred Stock shall be redeemable, in whole or in part,
at the option of the Corporation at any time after January 1, 2004, out of funds
legally available therefor,  at the following redemption prices per share (or if
pursuant to paragraph  (C) of this  Subsection  6, at the  redemption  price set
forth therein):

<TABLE>
<CAPTION>
 DURING THE TWELVE-MONTH
    PERIOD BEGINNING                           PRICE PER SHARE
    ----------------                           ---------------
<S>                           <C>
Jan. 1, 2004                  102% of the Liquidation Price in effect on date fixed for redemption
Jan. 1, 2005                  101% of the Liquidation Price in effect on date fixed for redemption
Jan. 1, 2006                  100% of the Liquidation Price in effect on date fixed for redemption
</TABLE>



<PAGE>




and thereafter at 100% of the Liquidation  Price per share in effect on the date
fixed for  redemption,  plus, in each case (including in the case of redemptions
pursuant to paragraph (C) or (D) of this  Subsection  6), an amount equal to all
accrued (whether or not  accumulated)  and unpaid dividends  thereon to the date
fixed for  redemption.  Payment  of the  redemption  price  shall be made by the
Corporation  in cash or shares of Common  Stock,  or a combination  thereof,  as
permitted by paragraph  (D) of this  Subsection 6. From and after the date fixed
for  redemption,  dividends  on shares of Series A  Preferred  Stock  called for
redemption  will cease to  accrue,  such  shares  will no longer be deemed to be
outstanding  and all rights in respect of such shares of the  Corporation  shall
cease, except the right to receive the redemption price. If less than all of the
outstanding  shares  of  Series  A  Preferred  Stock  are  to be  redeemed,  the
Corporation  shall  either  redeem  a  portion  of the  shares  of  each  holder
determined  pro rata based on the number of shares  held by each holder or shall
select the shares to be redeemed by lot,  as may be  determined  by the Board of
Directors of the Corporation.

      (B) Unless otherwise required by law, notice of redemption will be sent to
the holders of Series A Preferred Stock at the address shown on the books of the
Corporation  or any transfer  agent for Series A Preferred  Stock by first class
mail, postage prepaid, mailed not less than twenty (20) days nor more than sixty
(60) days  prior to the  redemption  date.  Each  notice  shall  state:  (i) the
redemption date; (ii) the total number of shares of the Series A Preferred Stock
to be  redeemed  and, if fewer than all the shares held by such holder are to be
redeemed,  the number of such shares to be redeemed from such holder;  (iii) the
redemption price; (iv) the place or places where certificates,  if certificated,
for such shares are to be surrendered for payment of the redemption  price;  (v)
that  dividends  on the  shares  to be  redeemed  will  cease to  accrue on such
redemption  date; (vi) the conversion  rights of the shares to be redeemed,  the
period within which conversion rights may be exercised, and the Conversion Price
and number of shares of Common  Stock  issuable  upon  conversion  of a share of
Series A Preferred  Stock at the time.  Upon surrender of the  certificates,  if
certificated,  for any shares so called for  redemption,  or upon the date fixed
for redemption, if uncertificated, such shares if not previously converted shall
be  redeemed  by the  Corporation  on the date fixed for  redemption  and at the
redemption price set forth in this Subsection 6.

      (C)  Notwithstanding  anything to the  contrary in  paragraph  (A) of this
Subsection 6, in the event that the Plan is terminated,  the Corporation may, in
its sole  discretion,  call for  redemption  any or all of the then  outstanding
Series A Preferred  Stock at a redemption  price  calculated on the basis of the
redemption prices provided in paragraph (A) of this Subsection 6, increased,  in
each such case, by 50% of the amount thereof in excess of 100%.

      (D) The  Corporation,  at its option,  may make payment of the  redemption
price required upon  redemption of shares of Series A Preferred Stock in cash or
in shares of Common Stock, or in a combination of such shares and cash, any such
shares of Common  Stock to be valued for such purpose at their Fair Market Value
as  defined in  paragraph  9(G)(2) of this Part A;  PROVIDED,  HOWEVER,  that in
calculating  their Fair Market Value the Adjustment Period shall be deemed to be
the five (5) consecutive trading days preceding the date of redemption.

7.    Redemption at the Option of the Holder


<PAGE>




      (A) Unless  otherwise  provided by law, shares of Series A Preferred Stock
shall be redeemed by the Corporation out of funds legally available therefor for
cash or,  if the  Corporation  so  elects,  in  shares  of  Common  Stock,  or a
combination  of such  shares  and cash,  any such  shares of Common  Stock to be
valued for such  purpose as provided by  paragraph  (D) of  Subsection 6 of this
Part A, at a redemption  price equal to the higher of (x) the Liquidation  Price
per share in effect on the date  fixed  for  redemption  or (y) the Fair  Market
Value of the number of shares of Common  Stock into which each share of Series A
Preferred  Stock is  convertible  at the time the notice of such  redemption  is
given  plus  in  either  case  an  amount  equal  to  accrued  (whether  or  not
accumulated) and unpaid dividends  thereon to the date fixed for redemption,  at
the option of the  holder,  at any time and from time to time upon notice to the
Corporation  given not less than five (5) business  days prior to the date fixed
by the holder in such notice of redemption, when and to the extent necessary for
such  holder to provide  for  distributions  required  to be made  under,  or to
satisfy an investment  election provided to participants in accordance with, the
Profit  Sharing Plan  incorporated  in the Employee  Savings Plans holder or his
affiliates,  or any successor plan or when the holder elects to redeem shares of
Series A  Preferred  Stock in respect of any Regular or  Supplemental  Preferred
Dividend (a "Dividend Redemption"). In the case of any Dividend Redemption, such
holder shall give the notice  specified above within (5) business days after the
related Series A Dividend Payment Date and such redemption shall be effective as
to such  number of shares of  Series A  Preferred  Stock as shall  equal (x) the
aggregate amount of such Regular or Supplemental Preferred Dividend with respect
to shares of Series A Preferred  Stock  allocated or credited to the accounts of
participants  in the Plan, or any successor  plan divided by (y) the  redemption
price specified above.

8.    Consolidation, Merger, etc.

      (A) In the event that the Corporation  shall consummate any  consolidation
or  merger  or  similar  transaction,  however  named,  pursuant  to  which  the
outstanding  shares of Common Stock are by operation of law exchanged solely for
or changed,  reclassified  or converted  solely into shares of any  successor or
resulting  company  (including  the  Corporation)  that  constitute  "qualifying
employer  securities" that are common stock with respect to a holder of Series A
Preferred  Stock within the  meanings of Section  409(1) of the Code and Section
407(d)(5) of ERISA, or any successor provision of law, and, if applicable, for a
cash payment in lieu of fractional  shares,  if any,  then,  in such event,  the
terms of such consolidation or merger or similar  transaction shall provide that
the shares of Series A Preferred Stock of such holder shall be converted into or
exchanged for and shall become  preferred  shares of such successor or resulting
company,  having in respect of such company insofar as possible the same powers,
preferences  and  relative,  participating,  optional  or other  special  rights
(including  the  redemption  rights  provided by Subsections 6, 7, and 8 of this
Part A), and the qualifications,  limitations or restrictions  thereon, that the
Series A Preferred Stock had immediately  prior to such  transaction;  PROVIDED,
HOWEVER, that after such transaction each share of stock into which the Series A
Preferred  Stock  is so  converted  or  for  which  it  is  exchanged  shall  be
convertible,  pursuant to the terms and  conditions  provided by Subsection 5 of
this  Part A,  into  the  number  and  kind of  qualifying  employer  securities
receivable  by a holder of the number of shares of Common  Stock into which such
shares  of Series A  Preferred  Stock  could  have been  converted  pursuant  to
Subsection 5 of this Part A immediately  prior to such transaction and provided,
further, that if by virtue of the


<PAGE>




structure of such  transaction,  a holder of Common Stock is required to make an
election with respect to the nature and kind of  consideration to be received in
such  transaction,  which election cannot  practicably be made by the holders of
the Series A Preferred  Stock,  then such election  shall be deemed to be solely
for  "qualifying  employer  securities"  (together,  if applicable,  with a cash
payment in lieu of  fractional  shares)  with the effect  provided  above on the
basis of the number and kind of qualifying employer  securities  receivable by a
holder of the number of shares of Common Stock into which the shares of Series A
Preferred Stock could have been converted  pursuant to Subsection 5 of this Part
A immediately prior to such transaction (it being understood that if the kind or
amount of qualifying employer securities  receivable in respect of each share of
Common Stock upon such transaction is not the same for each such share, then the
kind and amount of  qualifying  employer  securities  deemed to be receivable in
respect of each share of Common Stock for purposes of this proviso  shall be the
kind and amount so  receivable  per share of Common Stock by a plurality of such
shares).  The rights of the Series A Preferred Stock as preferred shares of such
successor  resulting  company  shall  successively  be  subject  to  adjustments
pursuant to  Subsection  9 of this Part A after any such  transaction  as nearly
equivalent  to the  adjustments  provided for by such  Subsection  prior to such
transaction. The Corporation shall not consummate any such merger, consolidation
or similar  transaction unless all the terms of this paragraph 8(A) are complied
with.

      (B) In the event that the Corporation  shall consummate any  consolidation
or  merger  or  similar  transaction,  however  named,  pursuant  to  which  the
outstanding  shares of Common  Stock are by operation  of law  exchanged  for or
changed,  reclassified  or converted  into other shares or securities or cash or
any  other  property,   or  any  combination   thereof,   other  than  any  such
consideration which is constituted solely of qualifying employer securities that
are common stock (as referred to in paragraph (A) of this Subsection 8) and cash
payments,  if applicable,  in lieu of fractional  shares,  outstanding shares of
Series  A  Preferred  Stock  shall,  without  any  action  on  the  part  of the
Corporation  or any  holder  thereof  (but  subject  to  paragraph  (C) of  this
Subsection 8), be automatically  converted immediately prior to the consummation
of such merger, consolidation or similar transaction into shares of Common Stock
at the  conversion  rate then in effect so that each share of Series A Preferred
Stock shall, by virtue of such transaction and on the same terms as apply to the
holders of Common Stock, be converted into or exchanged for the aggregate amount
of shares, securities,  cash or other property (payable in like kind) receivable
by a holder of the number of shares of Common  Stock  into which such  shares of
Series A Preferred  Stock could have been  converted  immediately  prior to such
transaction  if such holder of Common  Stock  failed to  exercise  any rights of
election as to the kind or amount of shares, securities,  cash or other property
receivable  upon  such  transaction  (provided  that,  if the kind or  amount of
shares,  securities,  cash or other property receivable upon such transaction is
not the same for each  non-electing  share,  then the kind and amount of shares,
securities,  cash or other property  receivable  upon such  transaction for each
non-electing  share  shall be the kind and amount so  receivable  per share by a
plurality of non-electing shares).

      (C) In the event the Corporation shall enter into any agreement  providing
for any  consolidation or merger or similar  transaction  described in paragraph
(B) of this  Subsection  8, then the  Corporation  shall as soon as  practicable
thereafter (and in any event at least ten (10) days before  consummation of such
transaction) give notice of such agreement and the material terms


<PAGE>




thereof to each  holder of Series A Preferred  Stock and each such holder  shall
have the right to elect, by written notice to the Corporation,  to receive, upon
consummation of such  transaction (if and when such transaction is consummated),
out of funds legally available  therefor,  from the Corporation or the successor
of the  Corporation,  in  redemption  and  retirement of such Series A Preferred
Stock, in lieu of any cash or other securities which such holder would otherwise
be entitled to receive under paragraph 8(B) of this Part A, a cash payment equal
to the redemption  price specified in paragraph (A) of Subsection 6 of this Part
A in effect on the date of the  consummation of such  transaction plus an amount
equal to all accrued (whether or not accumulated) and unpaid dividends.  No such
notice of redemption shall be effective unless given to the Corporation prior to
the close of business of the fifth  business day prior to  consummation  of such
transaction,  unless the Corporation or the successor of the  Corporation  shall
waive such prior  notice,  but any notice or  redemption  so given prior to such
time may be withdrawn by notice of withdrawal given to the Corporation  prior to
the close of business on the fifth  business day prior to  consummation  of such
transaction.

9.    Anti-dilution Adjustments

      (A)(1)Subject  to the  provisions of paragraph 9(E) of this Part A, in the
event the  Corporation  shall, at any time or from time to time while any of the
shares of the Series A Preferred  Stock are  outstanding,  (i) pay a dividend or
make a distribution  in respect of the Common Stock in shares of Common Stock or
(ii) subdivide the  outstanding  shares of Common Stock into a greater number of
shares, in each case whether by reclassification of shares,  recapitalization of
the Corporation (excluding a recapitalization or reclassification  effected by a
merger  or  consolidation  to which  Subsection  8 of this  Part A  applies)  or
otherwise,  then,  in such event,  the Board of Directors  shall,  to the extent
legally  permissible,  declare a dividend  in respect of the Series A  Preferred
Stock in shares of Series A  Preferred  Stock (a "Special  Dividend")  in such a
manner  that a holder of Series A  Preferred  Stock will become a holder of that
number of shares of Series A Preferred  Stock equal to the product of the number
of such  shares  held prior to such  event  times a  fraction  (the  "Sec.  9(A)
Non-Dilutive Share Fraction"), the numerator of which is the number of shares of
Common Stock  outstanding  immediately  after such event and the  denominator of
which is the number of shares of Common  Stock  outstanding  immediately  before
such event. A Special Dividend declared pursuant to this paragraph 9(A)(1) shall
be effective,  upon payment of such dividend or  distribution  in respect of the
Common  Stock,  as of the  record  date for the  determination  of  shareholders
entitled to receive such dividend or distribution (on a retroactive  basis), and
in the  case of a  subdivision  shall  become  effective  immediately  as of the
effective  date  thereof.  Concurrently  with  the  declaration  of the  Special
Dividend  pursuant  to  this  paragraph  9(A)(1),   the  Conversion  Price,  the
Liquidation  Price and the  Regular  Preferred  Dividend  Rate of all  shares of
Series A Preferred Stock shall be adjusted by dividing the Conversion Price, the
Liquidation  Price and the Regular  Preferred  Dividend Rate,  respectively,  in
effect  immediately  before  such  event by the  Sec.  9(A)  Non-Dilutive  Share
Fraction.

      (2) The  Corporation  and the Board of  Directors  shall each use its best
efforts to take all  necessary  or  appropriate  action for  declaration  of the
Special Dividend  provided in paragraph  9(A)(1) of this Part A but shall not be
required to call a special  meeting of  shareholders  in order to implement  the
provisions thereof. If for any reason the Board of Directors is precluded from


<PAGE>




giving full effect to the Special Dividend provided in paragraph 9(A)(1) of this
Part A,  then no such  Special  Dividend  shall be  declared,  but  instead  the
Conversion  Price shall  automatically  be adjusted by dividing  the  Conversion
Price in effect immediately before the event by the Sec. 9(A) Non-Dilutive Share
Fraction and the Liquidation Price and the Regular Preferred  Dividend Rate will
not be adjusted.  An  adjustment to the  Conversion  Price made pursuant to this
paragraph  9(A)(2)  shall be given  effect,  upon  payment of such a dividend or
distribution, as of the record date for the determination of holders entitled to
receive such dividend or distribution (on a retroactive  basis), and in the case
of a subdivision  shall become  effective  immediately  as of the effective date
thereof.  If subsequently  the Board of Directors is able to give full effect to
the Special Dividend as provided in paragraph  9(A)(1) of this Part A, then such
Special  Dividend  will  be  declared  and  other  adjustments  will  be made in
accordance  with the  provisions  of  paragraph  9(A)(1)  of this Part A and the
adjustment in the Conversion  Price as provided in this  paragraph  9(A)(2) will
automatically be reversed and nullified prospectively.

      (3) Subject to the  provisions  of  paragraph  9(E) of this Part A, in the
event the  Corporation  shall, at any time or from time to time while any of the
shares of the Series A Preferred Stock are outstanding,  combine the outstanding
shares  of  Common   Stock  into  a  lesser   number  of   shares,   whether  by
reclassification  of shares,  recapitalization  of the Corporation  (excluding a
recapitalization  or  reclassification  effected by a merger,  consolidation  or
other  transaction  to which  Subsection 8 of this Part A applies) or otherwise,
then, in such event,  the Conversion  Price shall  automatically  be adjusted by
dividing the  Conversion  Price in effect  immediately  before such event by the
Sec. 9(A) Non-Dilutive  Share Fraction and the Liquidation Price and the Regular
Preferred  Dividend Rate will not be adjusted.  An adjustment to the  Conversion
Price made pursuant to this paragraph 9(A)(3) shall be given effect  immediately
as of the effective date of such combination.

      (B)(1)Subject  to the  provisions of paragraph 9(E) of this Part A, in the
event the  Corporation  shall, at any time or from time to time while any of the
shares of Series A Preferred Stock are  outstanding,  issue to holders of shares
of  Common  Stock  as  a  dividend  or  distribution,  including  by  way  of  a
reclassification of shares or a recapitalization  of the Corporation,  any right
or warrant to purchase  shares of Common Stock (but not  including as a right or
warrant for this  purpose any  security  convertible  into or  exchangeable  for
shares of Common  Stock)  for a  consideration  having a Fair  Market  Value (as
hereinafter  defined)  per share less than the Fair  Market  Value of a share of
Common  Stock on the date of issuance of such right or  warrant,  then,  in such
event, the Board of Directors shall, to the extent legally permissible,  declare
a dividend  in respect  of the  Series A  Preferred  Stock in shares of Series A
Preferred Stock (a "Special  Dividend") in such a manner that a holder of Series
A  Preferred  Stock  will  become a holder of that  number of shares of Series A
Preferred  Stock equal to the product of the number of such shares held prior to
such event times a fraction (the "Sec. 9(B) Non-Dilutive  Share Fraction"),  the
numerator  of  which  is the  number  of  shares  of  Common  Stock  outstanding
immediately  before such issuance of rights or warrants plus the maximum  number
of shares of Common  Stock that could be acquired  upon  exercise in full of all
such rights and warrants and the denominator of which is the number of shares of
Common Stock outstanding  immediately before such issuance of warrants or rights
plus the number of shares of Common  Stock which could be  purchased at the Fair
Market  Value of a share of Common  Stock at the time of such  issuance  for the
maximum


<PAGE>




aggregate  consideration  payable  upon  exercise in full of all such rights and
warrants.  A Special Dividend  declared pursuant to this paragraph 9(B)(1) shall
be effective  upon such  issuance of rights or warrants.  Concurrently  with the
declaration  of the Special  Dividend  pursuant to this paragraph  9(B)(1),  the
Conversion Price, the Liquidation Price and the Regular Preferred  Dividend Rate
of all shares of Series A Preferred  Stock  shall be  adjusted  by dividing  the
Conversion Price, the Liquidation Price and the Regular Preferred Dividend Rate,
respectively,  in  effect  immediately  before  such  event  by  the  Sec.  9(B)
Non-Dilutive Share Fraction.

      (2) The  Corporation  and the Board of  Directors  shall each use its best
efforts to take all  necessary  steps or to take all  actions as are  reasonably
necessary or appropriate  for  declaration of the Special  Dividend  provided in
paragraph  9(B)(1)  but  shall not be  required  to call a  special  meeting  of
shareholders in order to implement the provisions thereof. If for any reason the
Board of Directors is precluded from giving full effect to the Special  Dividend
provided  in  paragraph  9(B)(1) of this Part A, then no such  Special  Dividend
shall be  declared,  but instead the  Conversion  Price shall  automatically  be
adjusted by dividing the Conversion Price in effect immediately before the event
by the Sec. 9(B)  Non-Dilutive  Share Fraction and the Liquidation Price and the
Preferred  Dividend Rate will not be adjusted.  An adjustment to the  Conversion
Price  made  pursuant  to this  paragraph  9(B)(2) of this Part A shall be given
effect upon such issuance of rights or warrants.  If  subsequently  the Board of
Directors  is able to give full  effect to the  Special  Dividend as provided in
paragraph  9(B)(1) of this Part A, then such Special  Dividend  will be declared
and  other  adjustments  will be made  in  accordance  with  the  provisions  of
paragraph  9(B)(1) of this Part A and the adjustment in the Conversion  Price as
provided in this paragraph 9(B)(2) will  automatically be reversed and nullified
prospectively.

      (C) (1) (i) Subject to the provisions of paragraph 9(E) of this Part A, in
the event the  Corporation  shall, at any time or from time to time while any of
the shares of Series A Preferred Stock are outstanding,  issue, sell or exchange
shares of Common  Stock  (other  than  pursuant  to (x) any right or  warrant to
purchase or acquire shares of Common Stock (including as such a right or warrant
any security  convertible into or exchangeable for shares of Common Stock),  (y)
any rights agreement  designated by the Board of Directors,  or (z) any employee
or  director  incentive,  compensation  or benefit  plan or  arrangement  of the
Corporation  or  any  subsidiary  of the  Corporation  heretofore  or  hereafter
adopted)  at a  purchase  price per share less than the Fair  Market  Value of a
share of Common Stock on the date of such issuance,  sale or exchange,  then, in
such event,  the Board of Directors  shall,  to the extent legally  permissible,
declare a  dividend  in respect  of the  Series A  Preferred  Stock in shares of
Series A Preferred  Stock (a "Special  Dividend") in such a manner that a holder
of Series A  Preferred  Stock will become the holder of that number of shares of
Series A Preferred  Stock equal to the product of the number of such shares held
prior to such event times a fraction (the "Sec.  9(C)(1)(i)  Non-Dilutive  Share
Fraction"),  the  numerator  of which is the  number of  shares of Common  Stock
outstanding  immediately before such issuance,  sale or exchange plus the number
of shares of Common Stock so issued,  sold or exchanged and the  denominator  of
which is the number of shares of Common  Stock  outstanding  immediately  before
such issuance,  sale or exchange plus the number of shares of Common Stock which
could be  purchased  at the Fair Market  Value of a share of Common Stock at the
time of such issuance,  sale or exchange for the maximum aggregate consideration
paid therefor.


<PAGE>




      (ii) In the event that the Corporation  shall, at any time or from time to
time while any Series A Preferred Stock is outstanding,  issue, sell or exchange
any right or warrant to purchase or acquire shares of Common Stock (including as
such a right or warrant of any security  convertible  into or  exchangeable  for
shares of Common  Stock  other than  pursuant  to (x) any  employee  or director
incentive, compensation or benefit plan or arrangement of the Corporation or any
subsidiary of the Corporation  heretofore or hereafter  adopted,  (y) any rights
agreement  designated  by the  Board  of  Directors,  and  (z) any  dividend  or
distribution on shares of Common Stock  contemplated  in paragraph  (9)(A)(1) of
this Part A for a consideration  having a Fair Market Value, on the date of such
issuance,  sale or exchange,  less than the Non-Dilutive  Amount (as hereinafter
defined),  then,  in such event,  the Board of  Directors  shall,  to the extent
legally  permissible,  declare a dividend  in respect of the Series A  Preferred
Stock in shares of Series A  Preferred  Stock (a "Special  Dividend")  in such a
manner that a holder of Series A Preferred  Stock will become the holder of that
number of shares of Series A Preferred  Stock equal to the product of the number
of such shares held prior to such event times a fraction (the "Sec.  9(C)(1)(ii)
Non- Dilutive Share  Fraction"),  the numerator of which is the number of shares
of Common  Stock  outstanding  immediately  before  such  issuance  of rights or
warrants  plus the  maximum  number  of shares of  Common  Stock  that  could be
acquired  upon  exercise  in  full  of all  such  rights  and  warrants  and the
denominator  of which is the  number  of  shares  of  Common  Stock  outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common  Stock which could be purchased at the Fair Market Value of a share of
Common  Stock  at the time of such  issuance  for the  total of (x) the  maximum
aggregate consideration payable at the time of the issuance, sale or exchange of
such right or warrant and (y) the maximum aggregate  consideration  payable upon
exercise in full of all such rights or warrants.

      (iii) A Special Dividend declared pursuant to this paragraph 9(C)(1) shall
be  effective  upon  the  effective  date of such  issuance,  sale or  exchange.
Concurrently  with the  declaration  of the  Special  Dividend  pursuant to this
paragraph  9(C)(1),  the Conversion Price, the Liquidation Price and the Regular
Preferred  Dividend  Rate of all  shares of Series A  Preferred  Stock  shall be
adjusted by dividing the Conversion Price, the Liquidation Price and the Regular
Preferred Dividend Rate,  respectively,  in effect immediately before such event
by the  Sec.  9(C)(1)(i)  Non-  Dilutive  Share  Fraction  or  Sec.  9(C)(1)(ii)
Non-Dilutive Share Fraction, as the case may be.

      (2) The  Corporation  and the Board of  Directors  shall each use its best
efforts to take all  necessary  steps or to take all  actions as are  reasonably
necessary or appropriate  for  declaration of the Special  Dividend  provided in
paragraph  9(C)(1)(i) or (ii) of this Part A but shall not be required to call a
special meeting of shareholders in order to implement the provisions thereof. If
for any reason the Board of Directors  is  precluded  from giving full effect to
any Special Dividend  provided in paragraph 9(C)(1) of this Part A, then no such
Special  Dividend  shall be  declared,  but instead the  Conversion  Price shall
automatically be adjusted by dividing the Conversion Price in effect immediately
before the event by the Sec.  9(C)(1)(i)  Non-Dilutive  Share  Fraction  or Sec.
9(C)(1)(ii) Non-Dilutive Share Fraction, as the case may be, and the Liquidation
Price  and  the  Regular  Preferred  Dividend  Rate  will  not be  adjusted.  An
adjustment to the Conversion Price made pursuant to this paragraph 9(C)(2) shall
be given effect upon the effective date of such issuance,  sale or exchange.  If
subsequently  the Board of  Directors is able to give full effect to the Special
Dividend as provided in paragraph 9(C)(1) of this Part A, then such


<PAGE>




Special  Dividend  will  be  declared  and  other  adjustments  will  be made in
accordance  with the  provisions  of  paragraph  9(C)(1)  of this Part A and the
adjustment in the Conversion  Price as provided in this  paragraph  9(C)(2) will
automatically be reversed and nullified prospectively.

      (D)(1)Subject  to the  provisions  of  paragraph  9(E),  in the  event the
Corporation  shall,  at any time or from time to time while any of the shares of
Series A Preferred Stock are outstanding, make an Extraordinary Distribution (as
hereinafter  defined of this Part A) in respect of the Common Stock,  whether by
dividend,  distribution,  reclassification  of shares or recapitalization of the
Corporation (including  capitalization or reclassification  effected by a merger
or  consolidation to which Subsection 8 of this Part A does not apply) or effect
a Pro Rata Repurchase (as  hereinafter  defined in this Part A) of Common Stock,
then,  in such  event,  the Board of  Directors  shall,  to the  extent  legally
permissible,  declare  a  dividend  of  Series A  Preferred  Stock  (a  "Special
Dividend")  in such a manner  that a holder of  Series A  Preferred  Stock  will
become a holder of that  number of shares of Series A  Preferred  Stock equal to
the  product of the  number of such  shares  held  prior to such  event  times a
fraction (the "Sec. 9(D) Non-Dilutive  Share Fraction"),  the numerator of which
is the  product  of (a)  the  number  of  shares  of  Common  Stock  outstanding
immediately before such Extraordinary Distribution or Pro Rata Repurchase minus,
in the case of a Pro Rata  Repurchase,  the  number of  shares  of Common  Stock
repurchased  by the  Corporation  multiplied  by (b) the Fair Market  Value of a
share of Common Stock on the day before the ex-dividend  date with respect to an
Extraordinary  Distribution  which is paid in cash and on the distribution  date
with respect to an Extraordinary  Distribution which is paid other than in cash,
or on the applicable  expiration date (including all extensions  thereof) of any
tender  offer which is a Pro Rata  Repurchase  or on the date of  purchase  with
respect to any Pro Rata Repurchase  which is not a tender offer, as the case may
be, and the  denominator of which is (i) the product of (x) the number of shares
of Common Stock outstanding  immediately before such Extraordinary  Distribution
or Pro Rata  Repurchase  multiplied  by (y) the Fair Market  Value of a share of
Common  Stock  on the  day  before  the  ex-dividend  date  with  respect  to an
Extraordinary  Distribution  which is paid in cash and on the distribution  date
with respect to an Extraordinary  Distribution which is paid other than in cash,
or on the applicable  expiration date (including all extensions  thereof) of any
tender  offer which is a Pro Rata  Repurchase,  or on the date of purchase  with
respect to any Pro Rata Repurchase  which is not a tender offer, as the case may
be, minus (ii) the Fair Market Value of the  Extraordinary  Distribution  or the
aggregate  purchase  price of the Pro Rata  Repurchase,  as the case may be. The
Corporation shall send each holder of Series A Preferred Stock (i) notice of its
intent to make any  Extraordinary  Distribution  and (ii) notice of any offer by
the Corporation to make a Pro Rata Repurchase, in each case at the same time as,
or as soon as practicable  after, such offer is first communicated to holders of
Common Stock or, in the case of an Extraordinary Distribution,  the announcement
of a record date in accordance with the rules of any stock exchange on which the
Common Stock is listed or admitted to trading.  Such notice  shall  indicate the
intended record date and the amount and nature of such dividend or distribution,
or the number of shares subject to such offer for a Pro Rata  Repurchase and the
purchase price payable by the Corporation pursuant to such offer, as well as the
Conversion  Price and the number of shares of Common Stock into which a share of
Series A Preferred  Stock may be converted at such time.  Concurrently  with the
Special Dividend paid pursuant to this paragraph 9(D)(1),  the Conversion Price,
the Liquidation Price and the Regular  Preferred  Dividend Rate of all shares of
Series A Preferred Stock shall be adjusted by dividing the Conversion Price, the


<PAGE>




Liquidation  Price and the Regular  Preferred  Dividend Rate,  respectively,  in
effect immediately before such Extraordinary Distribution or Pro Rata Repurchase
by the  Sec.  9(D)  Non-Dilutive  Share  Fraction  determined  pursuant  to this
paragraph 9(D)(1).

      (2) The  Corporation  and the Board of  Directors  shall each use its best
efforts to take all  necessary  steps or to take all  actions as are  reasonably
necessary or appropriate  for  declaration of the Special  Dividend  provided in
paragraph  9(D)(1)  of this Part A but shall not be  required  to call a special
meeting of shareholders in order to implement the provisions thereof. If for any
reason the Board of  Directors  is  precluded  from  giving  full  effect to the
Special  Dividend  provided  in  paragraph  9(D)(1) of this Part A, then no such
Special  Dividend  shall be  declared,  but instead the  Conversion  Price shall
automatically be adjusted by dividing the Conversion Price in effect immediately
before  the  event  by the  Sec.  9(D)  Non-Dilutive  Share  Fraction,  and  the
Liquidation Price and the Regular Preferred  Dividend Rate will not be adjusted.
If  subsequently  the  Board of  Directors  is able to give  full  effect to the
Special  Dividend  as provided  in  paragraph  9(D)(1) of this Part A, then such
Special  Dividend  will  be  declared  and  other  adjustments  will  be made in
accordance  with the  provisions  of  paragraph  9(D)(1)  of this Part A and the
adjustment in the Conversion  Price as provided in this  paragraph  9(D)(2) will
automatically be reversed and nullified prospectively.

      (E)  Notwithstanding  any  other  provision  of  this  Subsection  9,  the
Corporation  shall  not be  required  to make (i) any  Special  Dividend  or any
adjustment  of the  Conversion  Price,  the  Liquidation  Price  or the  Regular
Preferred  Dividend  Rate unless such  adjustment  would  require an increase or
decrease  of at least  one  percent  (1%) in the  number  of  shares of Series A
Preferred  Stock  outstanding  or,  (ii) if no  additional  shares  of  Series A
Preferred Stock are issued,  any adjustment of the Conversion  Price unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Conversion  Price. Any lesser  adjustment shall be carried forward and shall
be made no later  than  the time of,  and  together  with,  the next  subsequent
adjustment  which,  together  with any  adjustment  or  adjustments  so  carried
forward, shall amount to an increase or decrease of at least one percent (1%) of
the number of Series A Preferred Shares  outstanding or, if no additional shares
of Series A  Preferred  Stock are being  issued,  an  increase or decrease of at
least one percent (1%) of the Conversion Price, whichever the case may be.

      (F) If the  Corporation  shall make any  dividend or  distribution  on the
Common Stock or issue any Common Stock, other capital stock or other security of
the  Corporation  or any rights or  warrants  to  purchase  or acquire  any such
security,  which  transaction  does not result in an adjustment to the number of
shares of Series A Preferred Stock  outstanding or the Conversion Price pursuant
to the foregoing  provisions of this Subsection 9, the Board of Directors of the
Corporation may, in its sole discretion, consider whether such action is of such
a nature  that some type of  equitable  adjustment  should be made in respect of
such  transaction.  If in such case the Board of  Directors  of the  Corporation
determines that some type of adjustment  should be made, an adjustment  shall be
made  effective as of such date as  determined  by the Board of Directors of the
Corporation.  The  determination of the Board of Directors of the Corporation as
to whether  some type of  adjustment  should be made  pursuant to the  foregoing
provisions of this paragraph 9(F),  and, if so, as to what adjustment  should be
made  and  when,  shall  be  final  and  binding  on  the  Corporation  and  all
shareholders of the Corporation. The Corporation shall be entitled to make


<PAGE>




such  additional  adjustments,  in addition to those  required by the  foregoing
provisions  of this  Subsection  9, as shall  be  necessary  in  order  that any
dividend  or  distribution  in  shares  of  capital  stock  of the  Corporation,
subdivision, reclassification or combination of shares of the Corporation or any
recapitalization  of the  Corporation  shall not be  taxable  to  holders of the
Common Stock.

      (G) For purposes of this Part A, the following definitions shall apply:

      (1)  "Extraordinary   Distribution"  shall  mean  any  dividend  or  other
distribution  to holders of Common  Stock  (effected  while any of the shares of
Series A  Preferred  Stock are  outstanding)  of (i) cash or (ii) any  shares of
capital  stock of the  Corporation  (other than shares of Common  Stock),  other
securities of the Corporation  (other than securities of the type referred to in
paragraph  (B)  of  this  Subsection  9),   evidences  of  indebtedness  of  the
Corporation or any other person or any other property  (including  shares of any
subsidiary of the Corporation),  or any combination thereof, where the aggregate
amount of such cash dividend or other  distribution  together with the amount of
all cash dividends and other  distributions  made during the preceding period of
twelve (12) months,  when  combined  with the  aggregate  amount of all Pro Rata
Repurchases  (for this  purpose,  including  only that portion of the  aggregate
purchase price of such Pro Rata Repurchase which is in excess of the Fair Market
Value of the Common Stock repurchased as determined on the applicable expiration
date)  (including all extensions  thereof) of any tender offer or exchange offer
which is a Pro Rata  Repurchase,  or the date of  purchase  with  respect to any
other Pro Rata  Repurchase  which is not a tender  offer or exchange  offer made
during  such  period,  exceeds  twelve  and  one-half  percent  (12 1/2%) of the
aggregate Fair Market Value of all shares of Common Stock outstanding on the day
before the  ex-dividend  date with  respect to such  Extraordinary  Distribution
which  is  paid  in  cash  and on  the  distribution  date  with  respect  to an
Extraordinary  Distribution  which is paid other than in cash.  The Fair  Market
Value of an  Extraordinary  Distribution  for purposes of paragraph  (D) of this
Subsection  9 shall be the sum of the Fair  Market  Value of such  Extraordinary
Distribution   plus  the  aggregate  amount  of  any  cash  dividends  or  other
distributions which are not Extraordinary  Distributions made during such twelve
month period and not  previously  included in the  calculation  of an adjustment
pursuant to paragraph (D) of this  Subsection 9, but shall exclude the aggregate
amount of regular  quarterly  dividends  declared by the Board of Directors  and
paid by the Corporation in such twelve month period.

      (2) "Fair Market  Value"  shall mean,  as to shares of Common Stock or any
other  class of capital  stock or  securities  of the  Corporation  or any other
issuer which are publicly  traded,  the average of the Current Market Prices (as
hereinafter defined in this Part A) of such shares or securities for each day of
the Adjustment  Period (as hereinafter  defined in this Part A). "Current Market
Price" of publicly  traded  shares of Common Stock or any other class of capital
stock shall mean the last reported sales price, regular way, or, in case no sale
takes  place on such day,  the  average of the  reported  closing  bid and asked
prices,  regular way, in either case as reported on the New York Stock  Exchange
Composite  Tape or, if such security is not listed or admitted to trading on the
New York Stock Exchange,  on the principal national securities exchange on which
such  security is listed or admitted to trading or, if not listed or admitted to
trading on any  national  securities  exchange,  on the NASDAQ  National  Market
System or, if such security is not quoted on such National  Market  System,  the
average of the closing bid and asked prices on each such day


<PAGE>




in the over-the-counter market as reported by NASDAQ or, if bid and asked prices
for such security on each such day shall not have been reported  through NASDAQ,
the  average of the bid and asked  prices for such day as  furnished  by any New
York Stock  Exchange  member  firm  regularly  making a market in such  security
selected for such purpose by the board of Directors of the  Corporation  on each
trading day during the  Adjustment  Period.  "Adjustment  Period" shall mean the
period of five consecutive  trading days,  selected by the Board of Directors of
the Corporation, during the (20) trading days preceding, and including, the date
as of which the Fair Market Value of a security is to be  determined.  The "Fair
Market  Value"  of any  security  which is not  publicly  traded or of any other
property  shall mean the fair  value  thereof as  determined  by an  independent
investment  banking or  appraisal  firm  experienced  in the  valuation  of such
securities  or property  selected in good faith by the Board of Directors of the
Corporation,  or, if no such investment banking or appraisal firm is in the good
faith judgment of the Board of Directors  available to make such  determination,
as determined in good faith by the Board of Directors of the Corporation.

      (3) "Non-Dilutive  Amount" in respect of an issuance,  sale or exchange by
the  Corporation of any right or warrant to purchase or acquire shares of Common
Stock  (including any security  convertible  into or exchangeable  for shares of
Common  Stock)  shall mean the  difference  between  (i) the product of the Fair
Market  Value of a share of Common Stock on the day  preceding  the first public
announcement of such issuance, sale or exchange multiplied by the maximum number
of shares of Common Stock which could be acquired on such date upon the exercise
in full of such rights or warrants (including upon the conversion or exchange of
all such convertible or exchangeable securities), whether or not exercisable (or
convertible or exchangeable) at such date, and (ii) the aggregate amount payable
pursuant to such right or warrant to purchase or acquire such maximum  number of
shares  of  Common  Stock;  PROVIDED,  HOWEVER,  that  in  no  event  shall  the
Non-Dilutive  Amount be less than zero. For purposes of the foregoing  sentence,
in the case of a security  convertible into or exchangeable for shares of Common
Stock,  the amount payable pursuant to a right or warrant to purchase or acquire
shares of Common  Stock shall be the Fair Market  Value of such  security on the
date of the issuance, sale or exchange of such security by the Corporation.

      (4) "Pro Rata  Repurchase"  shall  mean any  purchase  of shares of Common
Stock by the Corporation or any subsidiary thereof,  whether for cash, shares of
capital stock of the Corporation, other securities of the Corporation, evidences
of  indebtedness  of the  Corporation  or any other person or any other property
(including  shares  of a  subsidiary  of the  Corporation),  or any  combination
thereof,  effected  while  any of the  shares of  Series A  Preferred  Stock are
outstanding,  pursuant to any tender offer or exchange  offer subject to Section
13(e) of the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"),
or any successor  provision of law, or pursuant to any other offer  available to
substantially all holders of Common Stock;  PROVIDED,  HOWEVER, that no purchase
of shares by the  Corporation  or any  subsidiary  thereof  made in open  market
transactions  shall be  deemed  a Pro  Rata  Repurchase.  For  purposes  of this
paragraph 9(G), shares shall be deemed to have been purchased by the Corporation
of any  subsidiary  thereof  "in open  market  transactions"  if they  have been
purchased substantially in accordance with the requirements of Rule 10b-18 as in
effect under the Exchange Act on the date shares of Series A Preferred Stock are
initially issued by the Corporation or on such other terms


<PAGE>




and  conditions  as the  Board  of  Directors  of  the  Corporation  shall  have
determined  are  reasonably  designed to prevent  such  purchases  from having a
material effect on the trading market for the Common Stock.

      (H)  Whenever an  adjustment  increasing  the number of shares of Series A
Preferred  Stock  outstanding is required  pursuant to this Part A, the Board of
Directors  shall take  action as is  necessary  so that a  sufficient  number of
shares of Series A Preferred  Stock are designated with respect to such increase
resulting from such adjustment.  Whenever an adjustment to the Conversion Price,
the  Liquidation  Price or the Regular  Preferred  Dividend Rate of the Series A
Preferred Stock is required  pursuant  hereto,  the Corporation  shall forthwith
place on file with the  transfer  agent for the  Common  Stock and the  Series A
Preferred Stock, if there be one, and with the Treasurer of the  Corporation,  a
statement signed by the Treasurer or any Assistant  Treasurer of the Corporation
stating the adjusted  Conversion Price,  Liquidation Price and Regular Preferred
Dividend Rate determined as provided  herein.  Such statement shall set forth in
reasonable  detail such facts as shall be  necessary  to show the reason and the
manner of computing such adjustment,  including any determination of Fair Market
Value involved in such computation. Promptly after each adjustment to the number
of shares of Series A Preferred Stock  outstanding,  the Conversion  Price,  the
Liquidation Price or the Regular Preferred  Dividend Rate, the Corporation shall
mail a notice  thereof  of the then  prevailing  number  of  shares  of Series A
Preferred Stock outstanding, the Conversion Price, the Liquidation Price and the
Regular  Preferred  Dividend Rate to each holder of shares of Series A Preferred
Stock.

10.   Miscellaneous

      (A) All notices  referred  to in this Part A shall be in writing,  and all
notices hereunder shall be deemed to have been given upon the earlier of receipt
thereof  or three  (3)  business  days  after  the  mailing  thereof  if sent by
registered mail (unless  first-class  mail shall be  specifically  permitted for
such notice under the terms hereof) with postage pre-paid,  addressed: (i) if to
the  Corporation,  to its office at 175 East Old Country Road,  Hicksville,  New
York 11801  (Attention:  Treasurer)  or to the  transfer  agent for the Series A
Preferred  Stock,  or other agent of the  Corporation  designated  as  permitted
hereby or (ii) if to any holder of the Series A Preferred Stock or Common Stock,
as the case may be, to such  holder at the  address of such  holder as listed in
the stock record books of the Corporation  (which may include the records of any
transfer agent for the Series A Preferred Stock or Common Stock, as the case may
be) or (iii) to such other address as the Corporation or any such holder, as the
case may be, shall have designated by notice similarly given.

      (B) The term "Common Stock" as used in this Part A means the Corporation's
Common Stock, par value $.01 per share, as the same exists at the date of filing
of this Certificate  pursuant to Section 805 of the Business  Corporation Law of
the State of New York,  or any other class of stock  resulting  from  successive
changes or  reclassifications  of such Common Stock consisting solely of changes
in par value,  or from par value to without par value, or from without par value
to par value.  In the event that, at any time as a result of an adjustment  made
pursuant to  Subsection 9 of this Part A, the holder of any shares of the Series
A Preferred Stock upon thereafter  surrendering such shares for conversion shall
become entitled to receive any shares or


<PAGE>




other  securities  of the  Corporation  other than shares of Common  Stock,  the
anti-dilution provisions contained in Subsection 9 of this Part A shall apply in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock, and the provisions of Subsections 1 through 8 and 10 of
this Part A with  respect to the  Common  Stock  shall  apply on like or similar
terms to any such other shares or securities.

      (C) The  Corporation  shall pay any and all stock transfer and documentary
stamp taxes that may be payable in respect of any issuance or delivery of shares
of Series A Preferred Stock or shares of Common Stock or other securities issued
on  account  of  Series A  Preferred  Stock  pursuant  thereto  or  certificates
representing such shares or securities.  The Corporation shall not, however,  be
required  to pay any such tax which may be payable  in  respect to any  transfer
involved in the  issuance  or delivery of shares of Series A Preferred  Stock or
Common Stock or other  securities  in a name other than that in which the shares
of  Series A  Preferred  Stock  with  respect  to  which  such  shares  or other
securities are issued or delivered were registered, or in respect of any payment
to any person with respect to any such shares or securities other than a payment
to the  registered  holder  thereof,  and shall not be required to make any such
issuance,  delivery of payment unless and until the person otherwise entitled to
such issuance, delivery or payment has paid to the Corporation the amount of any
such tax or has established,  to the satisfaction of the Corporation,  that such
tax has been paid or is not payable.

      (D) In the event that a holder of shares of Series A Preferred Stock shall
not by written  notice  designate the name in which shares of Common Stock to be
issued upon  conversion  of such shares  should be registered or to whom payment
upon  redemption  of shares of Series A  Preferred  Stock  should be made or the
address to which the certificate or certificates  representing  such shares,  or
such payment, should be sent, the Corporation shall be entitled to register such
shares,  and make  such  payment,  in the name of the  holder  of such  Series A
Preferred  Stock as  shown on the  records  of the  Corporation  and to send the
certificate or certificates or other documentation  representing such shares, or
such  payment,  to the  address  of such  holder  shown  on the  records  of the
Corporation.

      (E) The  Corporation  my  appoint,  and from  time to time  discharge  and
change,  a  transfer  agent  for the  Series A  Preferred  Stock.  Upon any such
appointment or discharge of a transfer agent, the Corporation  shall send notice
thereof by first-class mail, postage prepaid, to each holder of record of Series
A Preferred Stock.


PART B.                    SERIES AA PREFERRED STOCK

     1. Number and  Designation  of Series.  A series  consisting  initially  of
fourteen  million five hundred and twenty  thousand  (14,520,000)  shares of the
Preferred Stock of the par value of $25 per share is designated Preferred Stock,
7.95%, Series AA" (hereinafter called the "Series AA Preferred Stock").



<PAGE>




     2.  Dividend  Rate.  The dividend rate per annum of the shares of Series AA
Preferred Stock is $1.9875 per share. Dividends shall be calculated on the basis
of a 30-day month and a year of 360 days.

     3. Dividend  Payment  Dates.  The dividend  payment dates for the shares of
Series AA  Preferred  Stock are the first  days of March,  June,  September  and
December;  the initial dividend period for such shares shall commence on the day
when shares are issued and thereafter the dividend periods for such shares shall
be the quarterly periods beginning on such dates commencing September 1, 1998.

     4. Optional  Redemption.  The Series AA Preferred Stock will not be subject
to optional redemption.

     5.  Mandatory  Redemption.   Subject  to  the  restrictions  set  forth  in
Subsection 6 of this Part B, the  Corporation  shall redeem on June 1, 2000, all
of the outstanding  shares of Series AA Preferred  Stock at $25 per share,  plus
accrued  and  unpaid  dividends  to the  date of  redemption.  In the  case of a
redemption of Series AA Preferred  Stock as specified in this  Subsection 5, the
Corporation  shall take the action and provide the notice specified in paragraph
(d) of Subsection 11 of this Part B.

     6. Restrictions on Mandatory  Redemption.  Unless full cumulative dividends
for all past  dividend  periods and for the then current  dividend  period shall
have been paid or  declared  and set apart for  payment on the then  outstanding
Series AA  Preferred  Stock,  the  Corporation  shall  not  redeem  pursuant  to
Subsection  5 of this  Part B less  than all of the then  outstanding  shares of
Series AA Preferred Stock.

     7.  Restrictions  on Payments on Junior Stock.  The  Corporation  shall not
declare or pay or set apart any dividend for the Common Stock or any other class
of stock ranking junior to the Series AA Preferred Stock, or make any payment on
account  of,  or set  apart  money  for a sinking  or  analogous  fund for,  the
purchase,  redemption or other retirement of the Common Stock or any other class
of  stock  ranking  junior  to the  Series  AA  Preferred  Stock,  or  make  any
distribution in respect thereof,  either directly or indirectly,  and whether in
cash or property or obligations or stock of the Corporation,  unless at the date
of  declaration  in the  case of any such  dividend,  or at the date of any such
other payment, setting apart or distribution,  full cumulative dividends for all
past dividend  periods and for the then current  dividend period shall have been
paid or  declared  and set apart for payment on the then  outstanding  Series AA
Preferred  Stock,  other than shares of Series AA Preferred Stock  previously or
then to be called for redemption.

     8.  Restrictions  on Sinking Fund Payments on Other Stock.  The Corporation
shall not redeem or purchase  any shares  ranking on a parity with the Series AA
Preferred  Stock  as to  assets  or  dividends,  pursuant  to any  sinking  fund
requirement  (which  terms shall  include  any  analogous  requirement)  for the
redemption  or  purchase of such  shares,  and shall not set apart money for any
such  requirement,  at any time when the redemption  required by Subsection 5 of
this Part B shall be in arrears;  except that,  at any time when the  redemption
required by  Subsection  5 of this Part B shall be in arrears  and when  arrears
exist in respect of any sinking fund or analogous


<PAGE>




requirement  for any shares  ranking as aforesaid on a parity with the Series AA
Preferred  Stock,  the  Corporation  may redeem or purchase  for the  respective
requirements  shares of Series AA  Preferred  Stock and such other  shares,  pro
rata,  as nearly as  practicable,  according  to the  amounts  in dollars of the
arrears  in  the   redemptions   or  purchases   required  for  the   respective
requirements.

     9.  Acquisition  of Series AA Preferred  Stock.  Except as provided in this
Part B, the  Corporation  may,  at its  option,  purchase,  redeem or  otherwise
acquire any shares of Series AA Preferred Stock.

     10. Redemption Upon Voluntary  Dissolution,  Liquidation,  or Winding Up of
the  Corporation.  The  applicable  redemption  price payable upon any voluntary
dissolution,  liquidation,  or winding up of the Corporation as specified in the
second  paragraph of paragraph  (c) of Subsection 11 of this Part B shall be the
par value of the Series AA Preferred Stock.

     11. Other Provisions.

            (a) The  holders  of shares of Series AA  Preferred  Stock  shall be
entitled to receive,  if and when declared payable by the Board of Directors out
of assets  legally  available  for the  payment of  dividends,  cumulative  cash
dividends at such rate per share and payable quarterly on such dates as shall be
fixed by resolution  adopted by the Board of Directors  prior to the issuance of
such shares of Series AA Preferred  Stock.  Dividends on each share of Series AA
Preferred Stock shall commence to accrue on and be cumulative from the first day
of the current  dividend  period within which such share was issued.  If for any
past dividend  period or periods  dividends shall not have been paid or declared
and set apart for payment  upon all  outstanding  shares of Series AA  Preferred
Stock at the rate per annum  applicable  thereto,  the deficiency shall be fully
paid or declared and set apart for payment (at any time without reference to any
payment date) before any dividend shall be declared or paid or set apart for the
Common  Stock or any  other  class of stock  ranking  junior  to the  Series  AA
Preferred Stock. Accumulations of dividends shall not bear interest. In case the
stated  dividends are not paid in full, the shares of Series AA Preferred  Stock
shall share ratably with all other series of Preferred Stock ranking on a parity
with the  Series AA  Preferred  Stock in the  payment  of  dividends,  including
accumulations,  if any,  in  accordance  with the sums which would be payable on
said shares of Series AA Preferred Stock and all other series of Preferred Stock
ranking on a parity with the Series AA  Preferred  Stock if all  dividends  were
declared and paid in full.

            (b) The  holders  of the  Series  AA  Preferred  Stock  shall not be
entitled to receive any dividends  thereon other than the dividends  referred to
in paragraph (a) of this Subsection 11.

            (c) Upon any involuntary dissolution,  liquidation, or winding up of
the  Corporation,  the holders of shares of Series AA  Preferred  Stock shall be
entitled to receive out of the assets of the Corporation, the par value of their
shares,  plus,  in the case of each share,  an amount equal to all  dividends on
such  share  accrued  and  unpaid  thereon  to the  date of  payment  upon  such
dissolution,   liquidation  or  winding  up  of  the  Corporation,   before  any
distribution of


<PAGE>




the assets to be distributed shall be made to the holders of the Common Stock or
any other class of stock ranking junior to the Series AA Preferred Stock.

            Upon any voluntary  dissolution,  liquidation,  or winding up of the
Corporation,  the  holders  of  shares of Series  AA  Preferred  Stock  shall be
entitled to receive  out of the assets of the  Corporation  the then  applicable
redemption  price of their shares,  plus,  in the case of each share,  an amount
equal to all dividends on such share  accrued and unpaid  thereon to the date of
payment upon such  dissolution,  liquidation  or winding up of the  Corporation,
before any  distribution  of the assets to be  distributed  shall be made to the
holders of the Common  Stock or any other class of stock  ranking  junior to the
Series AA Preferred  Stock.  In case the amounts  payable on liquidation are not
paid in full,  the shares of all Series AA Preferred  Stock and all other series
ranking on a parity with the Series AA  Preferred  Stock shall share  ratably in
any distribution of assets other than by way of dividends in accordance with the
sums which  would be  payable  on such  distribution  if all sums  payable  were
discharged in full.

            After  payment to the  holders of Series AA  Preferred  Stock of the
preferential  amounts to which they are entitled upon an  involuntary  or upon a
voluntary  dissolution,  liquidation  or  winding  up,  as the case  may be,  as
hereinabove  provided in this Part B, the holders of Series AA Preferred  Stock,
as such,  shall  have no right or claim to any of the  remaining  assets  of the
Corporation, either upon any distribution of surplus assets, or upon involuntary
or upon voluntary dissolution, liquidation or winding up.

            The sale, lease, exchange, assignment, transfer or conveyance of all
or  substantially  all the  property  of the  Corporation  to, or the  merger or
consolidation of the Corporation into or with, any other  corporation  shall not
be  deemed to be an  involuntary  or a  voluntary  dissolution,  liquidation  or
winding up for the purposes of this paragraph (c).

            (d) Not less than thirty (30) nor more than sixty (60) days previous
to the date fixed for mandatory redemption pursuant to Subsection 5 of this Part
B, notice of the time and place  thereof shall be given to the holders of record
of the Series AA Preferred Stock so to be redeemed, by mail and publication in a
newspaper,  printed in the English  language and  customarily  published on each
business day, of general circulation in the Borough of Manhattan, City and State
of New  York,  in  such  manner  as  may be  prescribed  by the  By-laws  of the
Corporation  or by  resolution  of the Board of  Directors;  PROVIDED,  that the
accidental  failure to mail any such notice to one or more of such holders shall
not affect the validity of such  redemption  as to the other  holders,  and that
such notice  shall be deemed to have been duly given to any holder of the Series
AA Preferred  Stock within the meaning of the foregoing  provision when the same
shall have been published as aforesaid and a copy deposited in the United States
mails, postage prepaid, addressed to such holder at his last-known address as it
appears on the books of the Corporation; and, PROVIDED FURTHER, that such notice
shall  include a  statement  to the effect  that  privileges  of  conversion  or
exchange, if any, not theretofore expiring, will expire at the close of business
on the full business day next  preceding the date fixed for  redemption.  At any
time after notice of redemption  has been given in the manner  prescribed by the
By-laws of the  Corporation  or by  resolution  of the Board of Directors to the
holders of Series AA Preferred  Stock so to be  redeemed,  the  Corporation  may
deposit funds sufficient for such redemption with a solvent bank


<PAGE>




or trust company having its principal  office in the Borough of Manhattan,  City
and State of New York and  having a  combined  capital  and  surplus of at least
$5,000,000  named in such notice  payable on the date fixed for  redemption,  as
aforesaid, and in the amounts aforesaid, to the respective orders of the holders
of the shares of Series AA Preferred Stock so to be redeemed,  on endorsement to
the  Corporation  or otherwise,  as may be required,  and upon  surrender of the
certificates for such shares.  Upon the deposit of said money as aforesaid,  or,
if no such deposit is made,  upon said  redemption  date (unless the Corporation
defaults in making payment of the redemption  price) such holders shall cease to
be shareholders  with respect to said shares of Series AA Preferred  Stock,  and
from and after the making of said deposit, or, if no such deposit is made, after
the redemption date (the  Corporation not having defaulted in making the payment
of the redemption  price),  the said holders shall have no interest in or claims
against the  Corporation  with respect to said shares of the Series AA Preferred
Stock,  except  only the right to  receive  said  moneys  on the date  fixed for
redemption,  as  aforesaid,  from  said  bank or  trust  company,  or  from  the
Corporation,  as the case may be, without interest thereon, upon endorsement, if
required,  and  surrender  of the  certificates  as  aforesaid  and the right to
exercise,  on or before  the close of  business  on the full  business  day next
preceding the date fixed for  redemption,  privileges of conversion or exchange,
if any, not  theretofore  expiring.  Any moneys  deposited by the Corporation as
aforesaid  which  shall  not be  required  for such  redemption  because  of the
exercise of any such right of conversion  or exchange  subsequent to the date of
such deposit shall be repaid to the Corporation forthwith. In case the holder of
any Series AA Preferred  Stock redeemed as aforesaid  shall not,  within six (6)
years after said  deposit,  claim the amount  deposited  as above stated for the
redemption  thereof,  the  depositary  shall,  upon  demand,  pay  over  to  the
Corporation  such amount so  deposited  and the  depositary  thereupon  shall be
relieved from all responsibility to such holder.

            Subject  to the  provisions  of this Part B, the Board of  Directors
shall have  authority to prescribe  from time to time the manner in which Series
AA Preferred Stock shall be redeemed and cancelled.

            Nothing  herein  contained in this Part B shall limit or deprive the
Corporation of the right to redeem or purchase any shares of Series AA Preferred
Stock in any other manner now or hereafter permitted by law.

            (e) Except as provided  in this Part B and except as some  provision
of law  expressly  confers a right to vote  regardless  of any  provision to the
contrary in this  Certificate  or other  certificate  filed pursuant to law, the
holders of Series AA  Preferred  Stock  shall not be  entitled  to any notice of
meetings of shareholders of the Corporation, or to vote, or to any voting rights
whatsoever  as  shareholders  of the  Corporation,  and are hereby  specifically
excluded  from the right to vote in a proceeding  for  authorizing  any guaranty
pursuant  to  Section  908 of the  Business  Corporation  Law,  for  sale of the
franchises and property pursuant to Section 909 of the Business Corporation Law,
for establishing priorities or creating preferences among the various classes of
stock pursuant to Section 801 of the Business Corporation Law, for consolidation
or merger pursuant to Section 901 of the Business Corporation Law, for voluntary
dissolution  pursuant to Section  1001 of the Business  Corporation  Law, or for
change of name pursuant to the Business


<PAGE>




Corporation  Law, or in the election of directors or in any other  proceeding or
at any shareholders' meeting.

            The foregoing  provisions of paragraph (e) of this Subsection 11 are
subject to the following:

            (1) So  long  as  any  shares  of  Series  AA  Preferred  Stock  are
outstanding, the Corporation shall not without authorization (given in person or
by proxy,  in writing or at a meeting duly called for that purpose in accordance
with Section 605 of the Business  Corporation Law of the State of New York or as
otherwise  permitted by law) by at least  two-thirds of the votes entitled to be
cast by the holders of the total number of shares of Series AA  Preferred  Stock
then outstanding:

               (A) amend,  alter,  change or repeal any of the express  terms of
          the Series AA Preferred  Stock then  outstanding in a manner to affect
          the holders of such shares  adversely  otherwise  than to increase the
          authorized number of shares of Series AA Preferred Stock; or

               (B) create or  authorize  any class of stock  having a preference
          superior to the  preferences  of the Series AA  Preferred  Stock as to
          assets or dividends,  or create or authorize any security  convertible
          into shares of stock of any such kind; or

               (C) issue any shares of, or ranking on a parity with,  the Series
          AA Preferred Stock under this Certificate,  unless for any twelve (12)
          consecutive  calendar  months within the fifteen (15) calendar  months
          immediately  preceding the calendar month within which such additional
          shares shall be issued, the net earnings of the corporation liable for
          the payment of interest charges on the Corporation's  interest bearing
          indebtedness,  determined  after  provision for  depreciation  and all
          taxes,  and in accordance with sound accounting  practice,  shall have
          been at least one and  one-half  (1-1/2)  times the  aggregate  of the
          annual interest  charges on the interest  bearing  indebtedness of the
          Corporation  and  annual  dividend  requirements  on all shares of, or
          ranking on a parity with,  Series AA Preferred Stock to be outstanding
          immediately  after the proposed issue of such shares of, or ranking on
          a parity with, the Series AA Preferred Stock.  There shall be excluded
          from  the  foregoing   computation,   interest  charges  on  all  such
          indebtedness  and  dividends  on all stock  which is to be  retired in
          connection  with the issue of such  shares  of, or ranking on a parity
          with, the Series AA Preferred Stock.  Where such shares of, or ranking
          on a parity with,  the Series AA  Preferred  Stock are to be issued in
          connection with the  acquisition of new property,  the net earnings of
          the  property so acquired  may be included on a pro forma basis in the
          foregoing computation,  computed on the same basis as the net earnings
          of the Corporation.

                  Nothing  in  this  clause  (C)  however   shall   prevent  the
Corporation  from issuing  shares of, or ranking on a parity with, the Series AA
Preferred Stock in connection with the purchase, redemption or other acquisition
of or any  exchange  for shares of, or ranking on a parity  with,  the Series AA
Preferred  Stock,  if the aggregate  amount of annual  dividends  payable on the
shares to be issued and the aggregate  amount  payable on such shares in case of
voluntary


<PAGE>




dissolution  shall not exceed said respective  amounts payable on the shares of,
or  ranking on a parity  with,  the Series AA  Preferred  Stock  which are to be
purchased, redeemed or otherwise acquired.

                  (2) So long as any  shares of Series  AA  Preferred  Stock are
outstanding, the Corporation shall not without authorization (given in person or
by proxy,  in writing or at a meeting duly called for that purpose in accordance
with Section 605 of the Business  Corporation Law of the State of New York or as
otherwise  permitted  by law) by a majority of the votes  entitled to be cast by
the holders of the total  number of shares of Series AA  Preferred  Stock of the
Corporation then outstanding:

               (A) sell,  lease,  exchange,  assign,  transfer  or convey all or
          substantially  all of the property or business of the  Corporation  or
          merge  or  consolidate  into  or with  any  other  company;  PROVIDED,
          HOWEVER,   that   nothing   herein   contained   shall   require  such
          authorization  in  respect  of  the  merger  or  consolidation  of the
          Corporation  into or with any other  company if the company  resulting
          from such merger or consolidation will,  immediately after such merger
          or consolidation,  have only such authorized classes of stock and such
          outstanding  shares of stock as would have been permitted  immediately
          prior to such  merger or  consolidation  under the  provisions  hereof
          without any further  consent of the holders of the Series AA Preferred
          Stock, and if each holder of the Series AA Preferred Stock immediately
          preceding such merger or  consolidation  shall receive the same number
          of shares,  with the same  rights and  preferences,  of the  resulting
          company.  For the  purposes of this clause (A) insofar as any earnings
          test may be  applicable,  the earnings,  interest  charges on debt and
          dividend requirements of the merging or consolidating  companies shall
          be determined on a combined basis; or

               (B)  increase  the  authorized  number  of  shares  of  Series AA
          Preferred Stock.

                   (3) If and when dividends  payable on any shares of Series AA
Preferred Stock shall be in default in an amount equivalent to or exceeding four
(4) full quarterly  dividends,  thereafter and until all dividends on the shares
of Series AA Preferred Stock in default shall have been paid or declared and set
aside for  payment,  the  holders  of the shares of Series AA  Preferred  Stock,
voting  separately  as a class and  regardless  of series,  shall be entitled to
elect the smallest number of directors necessary to constitute a majority of the
full Board of Directors,  and,  subject to the provisions of Article IV, Section
5, Part C,  Subsection 7 hereof,  the holders of the shares of the Common Stock,
voting separately as a class, shall be entitled to elect the remaining directors
of  the  Corporation,  anything  herein  or  in  the  By-laws  to  the  contrary
notwithstanding.  The terms of office of all persons who may be directors of the
Corporation  shall  terminate  upon the  election  of a majority of the Board of
Directors by the holders of the shares of Series AA Preferred Stock,  whether or
not the holders of the shares of the Common  Stock  shall then have  elected the
remaining directors of the Corporation.

                  (4) If and when all dividends then in default on the shares of
Series AA  Preferred  Stock then  outstanding  shall be paid or declared and set
aside for payment  (and such  dividends  shall be  declared  and paid out of any
funds legally available therefor as soon as


<PAGE>




reasonably  practicable),  the  holders of shares of Series AA  Preferred  Stock
shall be divested of the special right with respect to the election of directors
provided in paragraph  (e)(3) of this Subsection 11, and the voting power,  with
respect thereto, shall, subject to the provisions of Article IV, Section 5, Part
C, Subsection 7 hereof, revert to the holders of the shares of the Common Stock;
but always subject to the same  provisions for vesting such special right in the
holders  of the  shares of Series AA  Preferred  Stock in case of  further  like
default or defaults in dividends thereon as provided in paragraph (e)(3) of this
Subsection  11. Upon the  termination  of any such special right upon payment or
setting  aside for payment of all  accumulated  and  defaulted  dividends on the
shares of Series AA Preferred  Stock, the terms of office of all persons who may
been elected  directors of the  Corporation by vote of the holders of the shares
of Series AA Preferred  Stock, as a class,  pursuant to such special right shall
forthwith terminate,  and the resulting vacancies shall be filled by the vote of
a majority of the remaining directors.

                  (5) In the case of any  vacancy  in the  office of a  director
occurring among the directors  elected by the holders of the shares of Series AA
Preferred Stock, as a class,  pursuant to the foregoing  provisions of this Part
B, the remaining  directors  elected by such holders,  by affirmative  vote of a
majority thereof,  or the remaining director so elected if there be but one, may
elect a successor or successors  to hold office for the  unexpired  terms of the
director or directors whose place or places shall be vacant,  and such successor
or successors shall be deemed to have been elected by such holders.

                  (6) Whenever  under the  provisions  of this Part B, the right
shall have accrued to the holders of the shares of Series AA Preferred  Stock to
elect  directors,  the Board of  Directors  shall  within  ten (10)  days  after
delivery to the Corporation at its principal  office of a request to such effect
signed by any holder of shares of Series AA  Preferred  Stock  entitled to vote,
call a special  meeting of the  shareholders  to be held within  fifty (50) days
from the delivery of such request for the purpose of electing  directors (unless
under the  provisions of the By-laws of the  Corporation  as then in effect,  an
annual  meeting of  shareholders  of the  Corporation is to be held within sixty
(60) days after the vesting in the holders of the Series AA  Preferred  Stock of
the right to elect  directors).  At all  meetings of  shareholders  held for the
purpose of electing  directors  during such time as the holders of the shares of
Series AA Preferred Stock shall have the special right, voting separately and as
a class, to elect directors  pursuant hereto, the presence in person or by proxy
of the  holders  of a  majority  of the  outstanding  shares of any other  class
entitled to vote at such  meeting  shall be required to  constitute  a quorum of
that other class for the election of directors, and the presence in person or by
proxy of the holders of shares  representing a majority of the votes entitled to
be cast by the  holders  of the total  number  of shares of Series AA  Preferred
Stock then  outstanding  shall be required to  constitute a quorum of such class
for the election of directors;  PROVIDED,  HOWEVER, that the absence of a quorum
of the  holders of stock of any such class  shall not  prevent  the  election of
directors at any such meeting (or at any  government  thereof) by the other such
class or classes if the  necessary  quorum of the holders of stock of such class
or classes is present in person or by proxy at such meeting; in the absence of a
quorum of the holders of stock of any class of stock a majority of those holders
of the stock of such  class who are  present  in person or by proxy  shall  have
power to adjourn the meeting for the election of the  directors to be elected by
such class from time to time  without  notice  other  than  announcement  at the
meeting  until a  quorum  shall be  present  in  person  or by  proxy,  but such
adjournment shall not be made to


<PAGE>




a date beyond the date for the  mailing of notice of the next annual  meeting of
the Corporation or special meeting in lieu thereof.

                  (7) Whenever the holders of Series AA Preferred Stock shall be
entitled, as a class, to vote,  authorize,  consent or otherwise act, they shall
be  entitled  to cast  one-quarter  of one  vote for each  share  of  Series  AA
Preferred Stock held by them.

                  (f) The holders of shares of Series AA Preferred  Stock at any
time outstanding shall have no preemptive or preferential right to subscribe for
or  purchase  any shares of stock,  or rights or options to  purchase  shares of
stock whether now or hereafter authorized, or any securities convertible into or
exchangeable for shares of stock or into rights or options to purchase shares of
stock of the Corporation of any class.


PART C.                    SERIES B PREFERRED STOCK
                                      AND
                           SERIES C PREFERRED STOCK

1.    Designations and Numbers of Shares.

            (a) CLASS B PREFERRED STOCK.  Five hundred and fifty-three  thousand
      (553,000)  shares of the Class B Preferred  Stock of the  Corporation  are
      hereby  constituted  as a series of  preferred  stock,  $100 par value per
      share,  stated  value $100 per share  (the  "Class B Stated  Value"),  and
      designated as "Class B Preferred Stock"  (hereinafter  called the "Class B
      Preferred Stock").

            (b) CLASS C PREFERRED STOCK.  One hundred and ninety-seven  thousand
      (197,000)  shares of the Class C Preferred  Stock of the  Corporation  are
      hereby  constituted  as a series of  preferred  stock,  $100 par value per
      share,  stated  value $100 per share  (the  "Class C Stated  Value"),  and
      designated as "Class C Preferred Stock"  (hereinafter  called the "Class C
      Preferred Stock" and, collectively,  with the Class B Preferred Stock, the
      "Designated Preferred Stock").

            As used herein,  the term "Applicable Stated Value" shall mean, with
      respect to the Class B Preferred Stock or the Class C Preferred  Stock, as
      the case may be,  the Class B Stated  Value or the  Class C Stated  Value,
      respectively. The term "Applicable Dividend Rate" shall mean, with respect
      to the Class B Preferred Stock or the Class C Preferred Stock, as the case
      may be, 7.07% or 7.17%, respectively.

2.    Rank.

            Each series of  Designated  Preferred  Stock shall,  with respect to
      dividend distributions and distributions upon the liquidation,  winding up
      or  dissolution of the  Corporation,  rank senior to all classes of common
      stock of the  Corporation,  and to each  other  class or series of capital
      stock of the Corporation ranking junior to such series of


<PAGE>




      Designated Preferred Stock, whether now or hereafter created (collectively
      referred  to  with  the  common  stock  of  the   Corporation  as  "Junior
      Securities").  Subject  to  Subsection  9 of this Part C,  each  series of
      Designated  Preferred Stock shall, with respect to dividend  distributions
      and distributions  upon the liquidation,  winding up or dissolution of the
      Corporation,  rank  on a  parity  with  the  other  series  of  Designated
      Preferred  Stock and any other  class or  series of  capital  stock of the
      Corporation  hereafter created which expressly provides that it ranks on a
      parity  with each  series of  Designated  Preferred  Stock as to  dividend
      distributions  or  distributions  upon  the  liquidation,  winding  up  or
      dissolution  of  the  Corporation   ("Parity   Securities").   Subject  to
      Subsection  9 of this Part C, each series of  Designated  Preferred  Stock
      shall, with respect to dividend  distributions and distributions  upon the
      liquidation,  winding up or dissolution of the Corporation, rank junior to
      each class or series of capital stock of the Corporation hereafter created
      which expressly provides that it ranks senior to such series of Designated
      Preferred Stock as to dividend  distributions  or  distributions  upon the
      liquidation,  winding  up  or  dissolution  of  the  Corporation  ("Senior
      Securities").

3.    Dividends.

            (a)  Beginning  on the date of  issuance of shares of each series of
      Designated  Preferred Stock, the Holders of the outstanding shares of each
      series of Designated  Preferred Stock shall be entitled to receive,  when,
      as and if  declared  by the  Board  of  Directors,  out of  funds  legally
      available  therefor,  cash  dividends  on each  share  of such  series  of
      Designated  Preferred  Stock,  at a per annum rate equal to the Applicable
      Dividend  Rate,  payable  quarterly.  All dividends  shall be  cumulative,
      whether  or not the  Corporation  has  earnings,  and  whether or not such
      dividends are  declared,  on a daily basis from the  Designated  Preferred
      Stock  Issue  Date  and  shall be  payable  quarterly  for each  Quarterly
      Dividend   Period,   payable   ratably  per  share  of  each  such  series
      outstanding,  in  arrears on each  Designated  Dividend  Payment  Date and
      commencing on the first  Designated  Dividend  Payment Date. Each dividend
      shall be payable to the  Holders of each  series of  Designated  Preferred
      Stock of record as they  appear on the stock books of the  Corporation  on
      such record dates,  not less than ten (10) nor more than  forty-five  (45)
      days preceding the related  Designated  Dividend Payment Date, as shall be
      fixed by the  Board of  Directors.  Holders  of  shares  of any  series of
      Designated Preferred Stock shall not be entitled to any dividend in excess
      of full  cumulative  dividends,  as  herein  provided,  on the  Designated
      Preferred Stock; PROVIDED, HOWEVER, that the Corporation's obligation to a
      transferee  of shares of any series of Designated  Preferred  Stock arises
      only if such  transfer,  sale or other  disposition  is made in accordance
      with the terms and  conditions  of this Part C and of  Section  8.1 of the
      Investor  Purchase  Agreement.  No interest shall be payable in respect of
      any dividends on any series of the Designated Preferred Stock which may be
      in arrears.

            (b) All  dividends  paid with  respect  to  shares of any  series of
      Designated Preferred Stock pursuant to paragraph 3(a) of this Part C shall
      be paid  ratably  on such  series  of  Designated  Preferred  Stock to the
      Holders thereof entitled thereto.



<PAGE>




            (c) Dividends on account of arrears for any past Dividend Period may
      be  declared  and  paid at any  time,  without  reference  to any  regular
      Dividend  Payment Date, to Holders of each series of Designated  Preferred
      Stock of  record on such  date,  not less than ten (10) days nor more than
      forty-five (45) days prior to the payment thereof,  as may be fixed by the
      Board of Directors.

            (d) Except as provided in the next sentence,  no dividends  shall be
      declared by the Board of  Directors or paid or funds set apart for payment
      of dividends by the  Corporation  on any Parity  Securities for any period
      unless all cumulative dividends shall have been or  contemporaneously  are
      declared  and  paid in  full,  or  declared  and a sum in cash  set  apart
      sufficient for such payment, on each series of Designated  Preferred Stock
      for all Dividend Periods terminating on or prior to the date of payment of
      such full  dividends  on such  Parity  Securities.  If  dividends  are not
      declared or paid in full, as afore said,  upon, or funds are not set apart
      for  payment of  dividends  on, the  shares of each  series of  Designated
      Preferred  Stock and any Parity  Securities,  dividends may nonetheless be
      declared or paid upon shares of such series of Designated  Preferred Stock
      and any Parity Securities, but only so long as such dividends are declared
      ratably on such series of Designated Preferred Stock so that the amount of
      dividends  declared  per share on the shares of such series of  Designated
      Preferred Stock and such Parity Securities shall in all cases bear to each
      other the same ratio that  accrued and unpaid  dividends  per share on the
      shares  of such  series of  Designated  Preferred  Stock  and such  Parity
      Securities bear to each other.

            (e) So long as any  shares  of any  series of  Designated  Preferred
      Stock are outstanding,  the Corporation shall not (i) declare,  pay or set
      apart for payment any dividend on any Junior Securities or make, and shall
      not permit any of its  subsidiaries to make, any payment on account of, or
      set apart for payment  money for a sinking or other  similar fund for, the
      purchase,  redemption or other retirement of, any Junior Securities or any
      warrants, rights, calls or options exercisable for or convertible into any
      Junior Securities or (ii) make any distribution in respect thereof, either
      directly or indirectly,  and whether in cash, obligations or shares of the
      Corporation or other property  (other than  distributions  or dividends in
      Junior Securities to the holders of Junior Securities), unless in any such
      case  referred  to in  clause  (i) or  (ii)  of this  paragraph  3(e)  all
      cumulative  dividends  determined in accordance  herewith for all Dividend
      Periods terminating on or prior to the date of such payment, distribution,
      purchase or  redemption  have been paid in full in cash on the  Designated
      Preferred Stock.

            (f)  Dividends  payable  on  shares  of  any  series  of  Designated
      Preferred  Stock for any full  Quarterly  Dividend  Period shall be in the
      amount of $1.7675 per share with  respect to the Series B Preferred  Stock
      and  $1.7925  per share  with  respect to the  Series C  Preferred  Stock.
      Dividends  payable on shares of any series of Designated  Preferred  Stock
      for any period  less than a full  Quarterly  Dividend  Period,  or for the
      Initial Dividend Period,  shall be computed on the basis of a 360-day year
      of twelve  30-day  months  and the  actual  number of days  elapsed in the
      period for which such dividends are payable.  If any  Designated  Dividend
      Payment Date occurs on a day that is not a Business Day, any


<PAGE>




      accrued dividends  otherwise  payable on such Designated  Dividend Payment
      Date shall be paid on the next succeeding Business Day.

            (g) Notwithstanding  the foregoing  provisions of this Subsection 3,
      in the event that at any time following the date hereof (whether before or
      after  redemption  of the Series B  Preferred  Stock or Series C Preferred
      Stock) there is for any reason a change in the DRD Rate (including without
      limitation  any  such  change  enacted  after  this  date,  but  effective
      retroactively)   that  is  effective  with  respect  to  any  Holder,  the
      applicable  dividend  rates on the  Designated  Preferred  Stock  shall be
      automatically adjusted for each Holder, effective as of the effective date
      of such change (or, if later,  as of the Closing  Date),  to the  dividend
      rate per annum  determined by multiplying the applicable  dividend rate on
      each series of the Designated Preferred Stock applicable immediately prior
      to such change by the Adjustment  Fraction;  PROVIDED,  HOWEVER,  that any
      adjustment to the applicable dividend rates resulting from a change in the
      DRD Rate enacted and effective  after December 1, 1999 shall not exceed 20
      basis  points;  PROVIDED,  FURTHER,  HOWEVER,  that in no event  shall the
      applicable  dividend rates be reduced below the applicable  dividend rates
      specified  in  paragraph  1(b) of this  Part C. The  Corporation  will pay
      additional  dividends on the Designated Preferred Stock from the effective
      date of each such change at the  applicable  dividend  rate as so adjusted
      from time to time. If for any reason (e.g., a retroactive  effective date)
      the  effective  date of a  change  in the DRD Rate is prior to one or more
      Designated Dividend Payment Dates for which dividend payments were due and
      payable on the Designated  Preferred Stock,  additional  dividend payments
      shall be  payable  in the  amount  by  which  dividends  computed  at such
      adjusted  rate  exceeds the  dividends  actually  theretofore  paid by the
      Corporation on the Designated  Preferred  Stock for such prior  Designated
      Dividend Payment Dates.  Additional  dividends  payable by the Corporation
      pursuant to the preceding  sentence shall be paid on the date fixed by the
      Corporation  no later than 30 days after the  enactment  of such change in
      the DRD Rate and shall be increased by an amount determined as if interest
      were  payable  on the unpaid  amount  commencing  on the prior  Designated
      Dividend Payment Dates to which each such additional  dividends relate and
      ending on the date such  additional  dividends are paid, at the applicable
      dividend rate after giving effect to the Adjustment Fraction.

4.    Liquidation Preference.

            (a) Upon any voluntary or  involuntary  liquidation,  dissolution or
      winding up of the affairs of the Corporation, the Holders of shares of any
      series of Designated Preferred Stock then outstanding shall be entitled to
      be paid, out of the assets of the Corporation  available for  distribution
      to its shareholders, $100 per share of such series of Designated Preferred
      Stock,  plus an amount  in cash  equal to  accrued  and  unpaid  dividends
      thereon to the date of final  distribution,  before any  payment  shall be
      made or any assets  distributed  to the holders of any Junior  Securities,
      including, without limitation, the Common Stock of the Corporation.  After
      such amount is paid in full, no further distributions or payments shall be
      made in respect of such series of Designated  Preferred Stock, such series
      of Designated  Preferred Stock shall no longer be deemed to be outstanding
      or be entitled to any other  powers,  preferences,  rights or  privileges,
      including


<PAGE>




      voting rights, and, upon the Corporation's written request, such series of
      Designated  Preferred Stock shall be surrendered  for  cancellation to the
      Corporation.

            (b) If the assets of the  Corporation  are not  sufficient to pay in
      full the liquidation payments payable to the Holders of outstanding shares
      of each  series  of  Designated  Preferred  Stock and the  holders  of all
      outstanding  shares of Parity  Securities,  then the  holders  of all such
      shares shall share equally and ratably in such  distribution  of assets of
      the  Corporation in accordance  with the amounts which would be payable on
      such  shares if the amount to which the Holders of  outstanding  shares of
      such series of Designated  Preferred  Stock and the holders of outstanding
      shares of all Parity Securities are entitled were paid in full.

            (c) Written notice of any liquidation,  dissolution or winding up of
      the affairs of the Corporation, stating the payment date or dates when and
      the place or places where the amounts  distributable in such circumstances
      shall be payable, shall be given by first class mail, postage prepaid, not
      less than thirty (30) days prior to any payment  date stated  therein,  to
      the  Holders  of each  series  of  Designated  Preferred  Stock  at  their
      respective  addresses  as the same shall  appear on the stock books of the
      Corporation.

            (d) For the purposes of this Subsection 4 (and subject to Subsection
      9 of this Part C), neither the sale, conveyance, exchange or transfer (for
      cash,  shares  of  stock,  securities  or other  consideration)  of all or
      substantially  all of the  property or assets of the  Corporation  nor the
      consolidation  or  merger  of the  Corporation  with or  into  one or more
      corporations  or other  entities  shall  be  deemed  to be a  liquidation,
      dissolution or winding up of the affairs of the Corporation.

5.    Optional Redemption.

            (a) The shares of Designated Preferred Stock shall not be redeemable
      or otherwise  purchased by the Corporation  prior to the fifth anniversary
      of the  Designated  Preferred  Stock  Issue  Date.  On and after the fifth
      anniversary of the Designated  Preferred Stock Issue Date, the Corporation
      may, at its option,  redeem at any time or from time to time,  in whole or
      in part,  in the manner  provided in this  Subsection 5, any or all of the
      shares of the Designated  Preferred  Stock, at a redemption price equal to
      $100 per share  plus an amount in cash  equal to all  accrued  and  unpaid
      dividends thereon to the date of redemption plus the Make-Whole Premium.

            (b) In the  event  of a  redemption  of only a  portion  of the then
      outstanding  shares of the Designated  Preferred  Stock,  the  Corporation
      shall effect such redemption  ratably according to the number of shares of
      Designated  Preferred  Stock held by each Holder of  Designated  Preferred
      Stock.

            (c) Not less than  twenty  (20) days nor more than  sixty  (60) days
      prior to the date fixed for any  redemption  of the  Designated  Preferred
      Stock,  written notice of redemption  (the  "Redemption  Notice") shall be
      given by first-class mail, postage prepaid,


<PAGE>




      to  each  Holder  of each  series  of  Designated  Preferred  Stock  to be
      redeemed,  at such Holder's address as the same appears on the stock books
      of the Corporation;  PROVIDED that neither the failure to give such notice
      nor any deficiency  therein shall affect the validity of the procedure for
      the redemption of any shares of any series of Designated  Preferred  Stock
      to be redeemed  except as to the Holder or Holders to whom the Corporation
      has failed to give said notice or except as to the Holder or Holders whose
      notice  was  defective.   The  Redemption  Notice  shall  state:  (i)  the
      redemption price; (ii) whether all or less than all the outstanding shares
      of the Designated  Preferred Stock are to be redeemed and the total number
      of shares of the  Designated  Preferred  Stock being  redeemed;  (iii) the
      number of shares of  Designated  Preferred  Stock held by the Holder being
      redeemed;  (iv) the date fixed for  redemption;  (v) that,  subject to the
      provisions of the Investor Purchase Agreement,  the Holder is to surrender
      to the Corporation,  at the place or places where  certificates for shares
      of Designated Preferred Stock are to be surrendered for redemption, in the
      manner  and at the  place  designated,  his  certificate  or  certificates
      representing the shares of Designated Preferred Stock to be redeemed;  and
      (vi) that dividends on the shares of the Designated  Preferred Stock to be
      redeemed shall cease to accrue on the date fixed for redemption unless the
      Corporation  defaults  in  the  payment  of  the  redemption  price.  Such
      Redemption  Notice  shall also  include a  calculation  of the  applicable
      estimated  Make- Whole  Premiums due in  connection  with such  redemption
      (calculated  as  if  the  date  of  such  notice  were  the  date  of  the
      redemption),  setting forth the details of such computation.  Two Business
      Days  prior to such  redemption,  the  Corporation  shall  deliver to each
      Holder of each series of Designated  Preferred  Stock a  certificate  of a
      senior financial officer of the Corporation  specifying the calculation of
      such Make-Whole Premiums as of the specified redemption date.

            (d)  Subject to the  Investor  Purchase  Agreement,  each  Holder of
      shares of any series of Designated  Preferred  Stock called for redemption
      shall  surrender  to  the  Corporation  the  certificate  or  certificates
      representing his shares of such series of Designated Preferred Stock to be
      redeemed at the place designated in the Redemption  Notice,  and upon such
      surrender  the full  redemption  price for such shares shall be payable in
      cash to such Holder,  and each surrendered  certificate  shall be canceled
      and retired.  In the event that less than all of the shares represented by
      any such  certificate  are  redeemed,  a new  certificate  shall be issued
      representing the unredeemed shares without cost to the Holder thereof.

            (e) In connection with any redemption  pursuant to this Subsection 5
      or Subsection 6 of this Part C below,  unless the Corporation  defaults in
      the payment in full of the applicable  redemption price,  dividends on the
      shares of each series of Designated  Preferred Stock called for redemption
      shall cease to accrue on the date fixed for redemption, and the Holders of
      such shares shall cease to have any further rights with respect thereto on
      the date  fixed  for  redemption,  other  than the  right to  receive  the
      redemption price, without interest.



<PAGE>




6.    Mandatory Redemption.

            On the Applicable  Mandatory Redemption Date (as defined below), all
      of the outstanding shares of the applicable series of Designated Preferred
      Stock shall be  redeemed,  at a  redemption  price equal to $100 per share
      plus an amount in cash equal to all accrued and unpaid  dividends  thereon
      to the date of redemption.  "Applicable  Mandatory Redemption Date" means,
      with  respect to the Series B  Preferred  Stock or the Series C  Preferred
      Stock, the seventh anniversary or the tenth anniversary,  respectively, of
      the Designated Preferred Stock Issue Date.

7.    Voting Rights.

            (a) The  Holders of shares of each  series of  Designated  Preferred
      Stock shall not be entitled or permitted to vote on any matter required or
      permitted to be voted upon by the shareholders of the Corporation,  except
      as otherwise required by law or as set forth below in this Subsection 7 or
      in Subsection 9 below.

            (b) In the  event  that the  Corporation  shall  have  failed to pay
      dividends  accumulated on any series of Designated Preferred Stock for any
      four (4) consecutive  Dividend Periods and such dividends remain unpaid or
      shall  fail to redeem  any  series of  Designated  Preferred  Stock on the
      Applicable  Mandatory Redemption Date, then the number of directors of the
      Corporation  shall be  increased  by two and the  Holders  of  outstanding
      shares of the  Designated  Preferred  Stock,  voting as a class,  shall be
      entitled to elect such two additional  directors.  Such voting right shall
      continue  until such time as all  accumulated  dividends on each series of
      Designated  Preferred  Stock have been paid or such  series of  Designated
      Preferred  Stock has been  redeemed,  as the case may be.  Within ten (10)
      days after such voting power shall have become so vested in the Designated
      Preferred  Stock,  the Board of Directors of the Corporation  shall call a
      special  meeting of the  Holders  of  Designated  Preferred  Stock for the
      purpose of electing the two directors,  at the place,  upon the notice and
      at the time provided by the Corporation's By-Laws for a special meeting of
      shareholders.  In lieu of holding such meeting, the Holders of record of a
      majority of the total number of outstanding shares of Designated Preferred
      Stock may, by action taken by written  consent as permitted by law and the
      Certificate of Incorporation  and By-laws of the  Corporation,  elect such
      additional directors.  In the event of a vacancy in the case of a director
      elected by the Holders of Designated  Preferred  Stock (unless at the time
      such vacancy occurs all accumulated dividends on each series of Designated
      Preferred  Stock  shall have been paid in full),  the  remaining  director
      elected by the Holders of Designated Preferred Stock (or appointed to fill
      a vacancy by a director so elected) shall appoint a successor to fill such
      vacancy or, if no director elected by the Holders of Designated  Preferred
      Stock (or  appointed to fill a vacancy by a director so elected)  remains,
      the  vacancies  shall be filled by  election  at a special  meeting of the
      Holders of Designated Preferred Stock or by written consent of the Holders
      of  record of a  majority  of the total  number of  outstanding  shares of
      Designated  Preferred  Stock,  as permitted by law and the  Certificate of
      Incorporation and By-laws of the Corporation. Either of the two additional
      directors  may be  removed  at any time with  cause  by,  and shall not be
      removed


<PAGE>




      otherwise  than  by,  the  Holders  of  Designated  Preferred  Stock.  The
      directors elected by the Holders of Designated Preferred Stock shall serve
      until the next annual meeting of the  shareholders  of the  Corporation or
      until  their  successors  shall be elected  and shall  qualify;  PROVIDED,
      HOWEVER,  that  whenever  during  the term of office of the  directors  so
      elected, all accumulated  dividends on each series of Designated Preferred
      Stock shall have been paid or such series of  Designated  Preferred  Stock
      has  been  redeemed,  as the  case  may be,  the  term of  office  of such
      directors  shall  forthwith  terminate  and the number of directors of the
      Corporation  shall  be  decreased  by two.  The  foregoing  right to elect
      directors  upon the  failure  of the  Corporation  to redeem any series of
      Designated  Preferred  Stock shall be in addition to all other  rights and
      remedies available to the Holders of Designated  Preferred Stock upon such
      failure.

            (c) In any  case in  which  the  Holders  of  shares  of  Designated
      Preferred Stock shall be entitled to vote pursuant to this Subsection 7 or
      pursuant to applicable law, each Holder of shares of Designated  Preferred
      Stock shall be entitled to one vote for each share of Designated Preferred
      Stock held.

8.    Conversion or Exchange.

            The Holders of shares of each series of Designated  Preferred  Stock
shall not have any rights or obligations to convert such shares into or exchange
such shares for shares of any other  class or classes or of any other  series of
any class or classes of capital stock of the Corporation or any other securities
of the Corporation.

9.    Restrictions.

            So long as any  shares  of any  series of the  Designated  Preferred
Stock are outstanding, the Corporation shall not without authorization (given in
person or by proxy,  in writing or at a meeting  duly called for that purpose in
accordance with Section 605 of the Business  Corporation Law of the State of New
York or as  otherwise  permitted  by law) by at least  two-thirds  of the  votes
entitled to be cast by the Holders of the total  number of shares of each series
of Designated Preferred Stock then outstanding:

            (a) amend,  alter,  change or repeal any of the express terms of any
      series of the Designated  Preferred  Stock then  outstanding in any manner
      that would adversely affect the Holders of such shares;

            (b)  create  or  authorize  any class of stock  having a  preference
      superior to the preferences of any series of Designated Preferred Stock as
      to assets or dividends,  or create or authorize  any security  convertible
      into shares of stock of any such kind; or

            (c)  sell,  lease,  exchange,  assign,  transfer  or  convey  all or
      substantially all of the property or business of the Corporation or merger
      or  consolidate  into or with any other Person;  PROVIDED,  HOWEVER,  that
      nothing herein  contained shall require such  authorization  in respect of
      the merger, consolidation, sale, lease, exchange, assignment, transfer or


<PAGE>




      conveyance of all or substantially all of the assets of the Corporation if
      (i) the Person which  survives such merger,  consolidation,  sale,  lease,
      exchange,  assignment,  transfer or conveyance  of assets is,  immediately
      after such merger,  consolidation or sale of assets, a solvent corporation
      organized  in the United  States of America and have only such  authorized
      classes of stock and such  outstanding  shares of stock as would have been
      permitted  immediately prior to such merger,  consolidation,  sale, lease,
      exchange,  assignment,  transfer or conveyance under the provisions hereof
      without any further  consent of the  Holders of the  Designated  Preferred
      Stock; and (ii) each Holder of the Designated  Preferred Stock immediately
      preceding  such merger or  consolidation  shall receive the same number of
      shares, with the same rights and preferences of the resulting company.

10.   Definitions.

            The  following  terms  shall have the  meanings  set forth below for
purposes of this Part C:

            "Adjustment Fraction" means the following percentage:

                        1 - ((1 - DRD) X 0.4)
                        1 - ((1 - DRDn) x 0.4)

      where:      DRD = the DRD Rate  immediately  before  the change in the DRD
                  Rate DRDn = the DRD Rate  immediately  after the change in the
                  DRD Rate.

      For purposes of the preceding sentence all DRD Rates shall be expressed in
      decimal  form.  The  Adjustment  Fraction will be rounded to three decimal
      places with  rounding up if the fourth  decimal place is 0.0005 or higher,
      and rounding down otherwise.

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

            "Business Day" means any day other than Saturday, Sunday or a day on
      which banking  institutions in the City of New York are authorized by law,
      regulation or executive order to remain closed.

            "Certificate of Incorporation"  means the Corporation's  Certificate
      of Incorporation, as amended from time to time.

            "Corporation" means this corporation.

            "Designated Dividend Payment Date" means each August 1 , November 1,
      February 1, and May 1 following the Designated Preferred Stock Issue Date.

            "Designated  Preferred Stock Issue Date" means the date on which the
      Designated Preferred Stock is originally issued by the Corporation.



<PAGE>




            "Discounted  Value" means,  with respect to any shares of any series
      of Designated  Preferred  Stock,  the amount  obtained by discounting  all
      Remaining Scheduled Payments with respect to such shares of such series of
      Designated  Preferred Stock from their  respective  scheduled due dates to
      the Optional  Redemption  Date,  in  accordance  with  accepted  financial
      practice and at a discount  factor  (applied on the same periodic basis as
      that on  which  dividends  with  respect  to  such  series  of  Designated
      Preferred Stock are payable) equal to the Reinvestment  Yield with respect
      to the  Applicable  Stated  Value of such shares of  Designated  Preferred
      Stock.

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

            "Domestic  Corporation" means a corporation organized under the laws
      of the United States or any State.

            "DRD Rate" means the percentage of dividends  received by a Domestic
      Corporation from another Domestic  Corporation that the recipient Domestic
      Corporation  is entitled to deduct for United  States  federal  income tax
      purposes  pursuant to Section 243 of the Internal Revenue Code of 1986, as
      amended,  or any  successor  provision,  without  regard to the  degree of
      ownership  in the payor  Domestic  Corporation  and without  regard to any
      generally applicable limitations on such deduction.

            "Holder"  means  a  Person  in  whose  name a  share  of  Designated
      Preferred Stock is registered.

            "Initial  Dividend  Period" means the dividend period  commencing on
      the Designated Preferred Stock Issue Date and ending on the day before the
      first Designated Dividend Payment Date to occur thereafter.

          "Investor Purchase  Agreement" means the Investor  Securities Purchase
     Agreement dated as of May 15, 1998 among Long Island  Lighting  Corporation
     and certain Holders of the Designated Preferred Stock.

            "Make-Whole Premium" means, with respect to any shares of any series
      of Designated  Preferred Stock, an amount equal to the excess,  if any, of
      (a) the Discounted Value of the Remaining  Scheduled Payments with respect
      to such  shares of  Designated  Preferred  Stock  over (b) the  Applicable
      Stated Value of such shares of such series of Designated  Preferred Stock;
      PROVIDED that the Make-Whole Premium may in no event be less than zero.

            "Optional  Redemption Date" means,  with respect to the any share of
      any  series  of  Designated   Preferred  Stock,  the  date  on  which  the
      Corporation  redeems such share in accordance  with paragraph 5(a) of this
      Part C.



<PAGE>




            "Person"  means  any  individual,  corporation,  partnership,  joint
      venture,  association,  limited liability  company,  joint-stock  company,
      trust,  unincorporated  organization  or government or agency or political
      subdivision  thereof (including any subdivision or ongoing business of any
      such  entity  or  substantially  all of the  assets  of any  such  entity,
      subdivision or business).

            "Quarterly Dividend Period" shall mean each of the quarterly periods
      ending on the last day of July, October, January and April of each year.

            "Redemption Date" means, with respect to any shares of any series of
      Designated  Preferred  Stock, the date on which such shares of such series
      of Designated Preferred Stock are redeemed by the Corporation.

            "Reinvestment  Yield" means,  with respect to the Applicable  Stated
      Value of any shares of any series of Designated Preferred Stock, 0.5% over
      the yield to maturity implied by (a) the yields reported, as of 10:00 A.M.
      (New York City time) on the second  Business  Day  preceding  the Optional
      Redemption  Date with  respect to such  Applicable  Stated  Value,  on the
      display designated as "Page 678" on the Dow Jones Markets Service (or such
      other display as may replace Page 678 on Dow Jones Markets Service) for ac
      tively  traded U.S.  Treasury  securities  having a maturity  equal to the
      Remaining  Life of  such  Applicable  Stated  Value  as of  such  Optional
      Redemption Date, or (b) if such yields are not reported as of such time or
      the yields  reported as of such time are not  ascertainable,  the Treasury
      Constant  Maturity  Series Yields  reported,  for the latest day for which
      such yields have been so reported as of the second  Business Day preceding
      the Optional Redemption Date with respect to such Applicable Stated Value,
      in Federal  Reserve  Statistical  Release  H.15  (519) (or any  comparable
      successor publication) for actively traded U.S. Treasury securities having
      a constant  maturity equal to the Remaining Life of such Applicable Stated
      Value as of such  Optional  Redemption  Date.  Such implied  yield will be
      determined,  if necessary, by (i) converting U.S. Treasury bill quotations
      to bond-equiva lent yields in accordance with accepted  financial practice
      and (ii)  interpolating  linearly  between  (A) the  actively  traded U.S.
      Treasury  security  with the  duration  closest  to and  greater  than the
      Remaining Life and (B) the actively traded U.S. Treasury security with the
      duration closest to and less than the Remaining Life.

            "Remaining Life" means,  with respect to the Applicable Stated Value
      of  any  shares  of  Designated  Preferred  Stock,  the  number  of  years
      (calculated to the nearest  one-twelfth year) that will elapse between the
      Optional  Redemption  Date  with  respect  to such  Stated  Value  and the
      Applicable Mandatory Redemption Date.

            "Remaining  Scheduled Payments" means, with respect to any shares of
      any series of Designated  Preferred  Stock,  the payment of the Applicable
      Stated Value of such shares of such series of Designated  Preferred  Stock
      and dividends thereon that would be due after the Optional Redemption Date
      with  respect  to such  Applicable  Stated  Value  if no  payment  of such
      Applicable  Stated  Value  were  made  prior to the  Applicable  Mandatory
      Redemption Date;  PROVIDED that if such Optional  Redemption Date is not a
      date on which dividends are


<PAGE>




      due to be made  under  the  terms  hereof,  then  the  amount  of the next
      succeeding  dividend  payment  will be  reduced  by the  amount of accrued
      dividends to such Optional Redemption Date and required to be paid on such
      Optional Redemption Date.

          "Stated  Value"  means  with  respect  to each  share of any series of
     Designated Preferred Stock, $100."


      FIFTH: The foregoing  amendments to the Certificate of Incorporation  were
duly  adopted by a Unanimous  Written  Consent of the Board of  Directors of the
Corporation  and by a  Unanimous  Written  Consent  of the  shareholders  of the
Corporation, in accordance with Section 803 of the New York Business Corporation
Law.


<PAGE>



      IN WITNESS  WHEREOF,  the  undersigned  officers of the  Corporation  have
signed this  Certificate of Amendment and each affirms that the statements  made
herein are true under the penalties of perjury.

Dated:  May 26, 1998

                                    MARKETSPAN CORPORATION

                                    By: /S/ WJ CATACOSINOS
                                    ----------------------
                                    Name:   Dr. William J. Catacosinos
                                    Title: Chief Executive Officer


                                    By: /S/ KATHLEEN A. MARION
                                    --------------------------
                                    Name:   Kathleen Marion
                                    Title:  Secretary

<PAGE>

                           CERTIFICATE OF AMENDMENT

                                    OF THE

                         CERTIFICATE OF INCORPORATION

                                      OF

                            MARKETSPAN CORPORATION

               Under Section 805 of the Business Corporation Law
                           of the State of New York



      MarketSpan  Corporation,  a corporation  organized and existing  under the
laws of the  State of New York  (the  "Corporation"),  does  hereby  certify  as
follows:

     FIRST: The present name of the Corporation is MarketSpan  Corporation.  The
Corporation was formed under the name "BL Holding Corp."

      SECOND: The Certificate of Incorporation of the Corporation was filed with
the New York Department of State on April 16, 1998. Certificates of Amendment of
the  Certificate  of  Incorporation  were filed with the New York  Department of
State on May 26, 1998 and June 1, 1998.

     THIRD: The amendment of the Certificate of Incorporation of the Corporation
effected by this Certificate of Amendment is as follows:

      To add  provisions  stating  the  number,  designation,  relative  rights,
      preferences and limitations of the shares of the Series D Preferred Stock,
      as fixed by the Board of Directors of the Corporation.

     FOURTH:  To  accomplish  the  foregoing   amendment,   Article  IV  of  the
Certificate of Incorporation  of the Corporation,  relating to the capital stock
of the Corporation, is hereby amended as follows:

      A Part D shall be inserted at the end of Section 5 of Article IV, and such
Part D shall read in its entirety as follows:

      "PART D     SERIES D PREFERRED STOCK

     Section 1.  Designation  and  Amount.  Two  million  (2,000,000)  shares of
Preferred  Stock,  par value $.01 per share,  are hereby  designated as Series D
Preferred Stock (the "Series D Preferred  Stock").  Such number of shares may be
increased or decreased by resolution of the


<PAGE>




Board of Directors;  provided that no decrease shall reduce the number of shares
of Series D  Preferred  Stock to a number  less than the  number of shares  then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding  options,   rights  or  warrants  or  upon  the  conversion  of  any
outstanding  securities  issued by the  Corporation  convertible  into  Series D
Preferred Stock.

      Section 2.  Dividends and Distributions.

      (A) Subject to the prior and superior  rights of the holders of any shares
of any  series of  Preferred  Stock (or any  similar  stock)  ranking  prior and
superior to the shares of Series D Preferred  Stock with  respect to  dividends,
the holders of shares of Series D Preferred  Stock in  preference to the holders
of Common Stock, par value $0.01 per share (the "Common Stock"), or of any other
junior  stock,  shall be entitled to  receive,  when,  as and if declared by the
Board of Directors  out of funds legally  available  for the purpose,  quarterly
dividends  payable  in cash on the  first  day of  March,  June,  September  and
December in each year (each such date being  referred to herein as a  "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series D Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the  provision  for  adjustment  hereinafter  set
forth,  one  hundred  (100)  times the  aggregate  per share  amount of all cash
dividends,  and one hundred (100) times the aggregate per share amount  (payable
in kind) of all non-cash dividends or other  distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding  shares of
Common Stock (by  reclassification  or otherwise),  declared on the Common Stock
since the  immediately  preceding  Quarterly  Dividend  Payment  Date,  or, with
respect to the first Quarterly  Dividend  Payment Date, since the first issuance
of any share or fraction of a share of Series D  Preferred  Stock.  In the event
the Corporation shall at any time after March 30, 1999 (the "Rights  Declaration
Date") (i) declare any dividend on the Common Stock  payable in shares of Common
Stock,  (ii)  subdivide  the  outstanding  Common  Stock,  or (iii)  combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series D Preferred  Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction,  the numerator of which is
the number of shares of Common Stock  outstanding  immediately  after such event
and the  denominator  of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

      (B) The Corporation shall declare a dividend or distribution on the Series
D Preferred  Stock as  provided  in  Paragraph  (A) above  immediately  after it
declares a dividend or  distribution  on the Common Stock (other than a dividend
payable in shares of Common  Stock);  provided that, in the event no dividend or
distribution  shall have been  declared  on the Common  Stock  during the period
between any Quarterly  Dividend  Payment Date and the next subsequent  Quarterly
Dividend  Payment  Date, a dividend of $1.00 per share on the Series D Preferred
Stock  shall  nevertheless  be payable  on such  subsequent  Quarterly  Dividend
Payment Date.

      (C)  Dividends  shall  begin to accrue and be  cumulative  on  outstanding
shares of Series D Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of


<PAGE>




such shares of Series D Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first  Quarterly  Dividend  Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series D Preferred  Stock  entitled to receive a quarterly  dividend  and before
such Quarterly  Dividend  Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative  from such  Quarterly  Dividend  Payment
Date.  Accrued but unpaid  dividends shall not bear interest.  Dividends paid on
the shares of Series D Preferred  Stock in an amount less than the total  amount
of such  dividends  at the time  accrued  and  payable on such  shares  shall be
allocated pro rata on a  share-by-share  basis among all such shares at the time
outstanding.  The Board of Directors may fix a record date for the determination
of holders of shares of Series D Preferred  Stock entitled to receive payment of
a dividend or distribution declared thereon,  which record date shall be no more
than thirty (30) days prior to the date fixed for the payment thereof.

     Section 3. Voting Rights. The holders of shares of Series D Preferred Stock
shall have the following voting rights:

      (A) Subject to the provision for adjustment  hereinafter  set forth,  each
share of Series D  Preferred  Stock  shall  entitle  the  holder  thereof to one
hundred (100) votes on all matters  submitted to a vote of the  shareholders  of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration  Date (i) declare any dividend on the Common Stock payable in shares
of Common Stock,  (ii) subdivide the outstanding  Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares,  then in each such
case the  number  of votes  per  share to which  holders  of  shares of Series D
Preferred Stock were entitled  immediately prior to such event shall be adjusted
by multiplying  such number by a fraction,  the numerator of which is the number
of shares of Common  Stock  outstanding  immediately  after  such  event and the
denominator  of which is the  number  of  shares  of  Common  Stock  outstanding
immediately prior to such event.

      (B) Except as otherwise  provided  herein or by law, the holders of shares
of Series D Preferred  Stock and the  holders of shares of Common  Stock and any
other capital stock of the  corporation  having general voting rights shall vote
together as one class on all matters  submitted to a vote of shareholders of the
Corporation.

      (C) (i) If at any time dividends on any Series D Preferred  Stock shall be
in  arrears  in an amount  equal to six (6)  quarterly  dividends  thereon,  the
occurrence  of such  contingency  shall mark the  beginning of a period  (herein
called a "default  period")  which shall extend until such time when all accrued
and unpaid  dividends for all previous  quarterly  dividend  periods and for the
current quarterly dividend period on all shares of Series D Preferred Stock then
outstanding  shall have been declared and paid or set apart for payment.  During
each default period,  all holders of Preferred Stock  (including  holders of the
Series D Preferred  Stock) with  dividends  in arrears in an amount equal to six
(6) quarterly  dividends  thereon,  voting as a class,  irrespective  of series,
shall have the right to elect two (2) Directors.



<PAGE>




            (ii) During any  default  period,  such voting  rights of holders of
Series D Preferred Stock may be exercised  initially at a special meeting called
pursuant to subparagraph  (iii) of this Section 3(C) or at any annual meeting of
shareholders,  and thereafter at annual meetings of shareholders,  provided that
neither  such voting  right nor the right of the holders of any other  series of
Preferred Stock, if any, to increase, in certain cases, the authorized number of
Directors  shall be exercised  unless the holders of ten percent (10%) in number
of shares of Preferred Stock outstanding shall be present in person or by proxy.
The  absence  of a quorum of the  holders of Common  Stock  shall not affect the
exercise by the holders of Preferred  Stock of such voting right. At any meeting
at which the  holders of  Preferred  Stock  shall  exercise  such  voting  right
initially during an existing default period,  they shall have the right,  voting
as a class, to elect  Directors to fill such vacancies,  if any, in the Board of
Directors  as may  then  exist  up to two (2)  Directors  or,  if such  right is
exercised at an annual meeting, to elect two (2) Directors.  If the number which
may be so elected at any special meeting does not amount to the required number,
the holders of the Preferred Stock shall have the right to make such increase in
the number of  Directors as shall be necessary to permit the election by them of
the  required  number.  After the  holders  of the  Preferred  Stock  shall have
exercised  their right to elect  Directors in any default  period and during the
continuance  of such period,  the number of Directors  shall not be increased or
decreased except by vote of the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities  ranking senior to or pari passu
with the Series D Preferred Stock.

            (iii)  Unless  the  holders  of  Preferred  Stock  shall,  during an
existing  default  period,  have  previously  exercised  their  right  to  elect
Directors,  the Board of Directors may order, or any shareholder or shareholders
owning in the  aggregate  not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding,  irrespective of series, may request, the
calling of a special  meeting of the holders of Preferred  Stock,  which meeting
shall  thereupon be called by the Chairman of the Board or the  President of the
Corporation.  Notice of such meeting and of any annual  meeting at which holders
of Preferred  Stock are  entitled to vote  pursuant to this  Paragraph  (C)(iii)
shall be given to each holder of record of Preferred  Stock by mailing a copy of
such notice to him at his last  address as the same  appears on the books of the
Corporation.  Such  meeting  shall be called for a time not earlier  than twenty
(20) days and not later than sixty (60) days after such order or  request,  such
meeting  may be called on  similar  notice by any  shareholder  or  shareholders
owning in the  aggregate  not less than ten percent (10%) of the total number of
shares of Preferred Stock  outstanding.  Notwithstanding  the provisions of this
Paragraph  (C)(iii),  no such special  meeting shall be called during the period
within sixty (60) days immediately  preceding the date fixed for the next annual
meeting of the shareholders.

            (iv) In any default period,  the holders of Common Stock,  and other
classes  of  stock of the  Corporation,  if  applicable,  shall  continue  to be
entitled to elect the whole number of  Directors  until the holders of Preferred
Stock shall have  exercised  their right to elect two (2) Directors  voting as a
class,  after the  exercise of which right (x) the  Directors  so elected by the
holders of Preferred Stock shall continue in office until their successors shall
have been elected by such holders or until the expiration of the default period,
and (y) any  vacancy  in the Board of  Directors  may  (except  as  provided  in
Paragraph (C)(ii) of this Section (3) be filled by vote of a


<PAGE>




majority of the remaining  Directors  theretofore  elected by the holders of the
class of stock which elected the Director whose office shall have become vacant.
References  in this  Paragraph  (C) to  Directors  elected  by the  holders of a
particular class of stock shall include  Directors  elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.

            (v)  Immediately  upon the expiration of a default  period,  (x) the
right of the  holders of  Preferred  Stock as a class to elect  Directors  shall
cease,  (y) the term of any Directors  elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such number
as  may  be  provided  for  in  the  certificate  of  incorporation  or  by-laws
irrespective  of any  increase  made  pursuant to the  provisions  of  Paragraph
(C)(ii)  of this  Section  3 (such  number  being  subject,  however,  to change
thereafter in any manner provided by law or in the certificate of  incorporation
or by-laws).  Any vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding  sentence may be filled by a majority of
the remaining Directors.

      (D) Except as set forth herein or as otherwise provided by law, holders of
Series D Preferred  Stock shall have no special  voting rights and their consent
shall not be  required  (except to the  extent  they are  entitled  to vote with
holders of Common Stock as set forth herein) for taking any corporate action.

      Section 4.  Certain Restrictions.

      (A)  Whenever  quarterly  dividends or other  dividends  or  distributions
payable on the Series D Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared,  on shares of Series D Preferred Stock  outstanding  shall have
been paid in full, the Corporation shall not

            (i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise  acquire for  consideration  any shares of stock
ranking  junior  (either as to dividends  or upon  liquidation,  dissolution  or
winding up) to the Series D Preferred Stock;

            (ii) declare or pay dividends on or make any other  distributions on
any  shares  of  stock  ranking  on a parity  (either  as to  dividends  or upon
liquidation,  dissolution  or  winding  up) with the Series D  Preferred  Stock,
except  dividends  paid  ratably  on the Series D  Preferred  Stock and all such
parity stock on which  dividends  are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;

            (iii)  redeem or purchase  or  otherwise  acquire for  consideration
shares  of any  stock  ranking  on a  parity  (either  as to  dividends  or upon
liquidation,  dissolution  or  winding  up) with the Series D  Preferred  Stock,
provided  that the  Corporation  may at any time  redeem,  purchase or otherwise
acquire  shares of any such parity  stock in exchange for shares of any stock of
the  Corporation  ranking  junior  (either as to dividends or upon  dissolution,
liquidation or winding up) to the Series D Preferred Stock; or

            (iv) purchase or otherwise  acquire for  consideration any shares of
Series D


<PAGE>




Preferred  Stock,  or any shares of stock  ranking on a parity with the Series D
Preferred  Stock,  except in accordance with a purchase offer made in writing or
by publication  (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of  Directors,  after  consideration  of the
respective  annual  dividend rates and other relative  rights and preferences of
the respective series and classes,  shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.

      (B) The Corporation  shall not permit any subsidiary of the Corporation to
purchase  or  otherwise  acquire  for  consideration  any shares of stock of the
Corporation unless the Corporation could, under Paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.

      Section  5.  Reacquired  Shares.Any  shares  of Series D  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and canceled promptly after the acquisition  thereof.  All such
shares shall upon their  cancellation  become  authorized but unissued shares of
Preferred  Stock and may be reissued as part of a new series of Preferred  Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein, in the Certificate
of Incorporation,  or in any other Certificate of Amendment creating a series of
Preferred Stock or any similar stock or as otherwise required by law.

      Section 6.  Liquidation, Dissolution or Winding Up.

      (A) Upon any liquidation (voluntary or otherwise),  dissolution or winding
up of the Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series D Preferred Stock unless,  prior thereto,  the holders
of shares of Series D Preferred  Stock shall have received $100 per share,  plus
an amount  equal to accrued  and unpaid  dividends  and  distributions  thereon,
whether or not declared,  to the date of such payment (the "Series D Liquidation
Preference").  Following  the  payment  of  the  full  amount  of the  Series  D
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Series D Preferred  Stock  unless,  prior  thereto,  the holders of
shares of Common  Stock  shall have  received  an amount per share (the  "Common
Adjustment")  equal  to the  quotient  obtained  by  dividing  (i) the  Series D
Liquidation  Preference by (ii) one hundred (100) (as appropriately  adjusted as
set forth in  subparagraph  (C) below to reflect  such  events as stock  splits,
stock  dividends and  recapitalizations  with respect to the Common Stock) (such
number,  the "Adjustment  Number").  Following the payment of the full amount of
the Series D Liquidation  Preference and the Common Adjustment in respect of all
outstanding  shares of Series D Preferred Stock and Common Stock,  respectively,
holders of Series D Preferred  Stock and holders of shares of Common Stock shall
receive their  ratable and  proportionate  share of the  remaining  assets to be
distributed  in the ratio of the  Adjustment  Number to one (1) with  respect to
such Preferred Stock and Common Stock, on a per share basis, respectively.

      (B) In the event,  however, that there are not sufficient assets available
to  permit  payment  in full of the  Series  D  Liquidation  Preference  and the
liquidation preferences of all other


<PAGE>




series of  Preferred  Stock,  if any,  which rank on a parity  with the Series D
Preferred Stock, then such remaining assets shall be distributed  ratably to the
holders of such parity  shares in  proportion  to their  respective  liquidation
preferences.  In the  event,  however,  that  there  are not  sufficient  assets
available  to  permit  payment  in  full of the  Common  Adjustment,  then  such
remaining assets shall be distributed ratably to the holders of Common Stock.

      (C) In the  event  the  Corporation  shall at any time  after  the  Rights
Declaration  Date (i) declare any dividend on Common Stock  payable in shares of
Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the  Adjustment  Number  in  effect  immediately  prior to such  event  shall be
adjusted by multiplying  such  Adjustment  Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the  denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

      Section 7.  Consolidation,  Merger,  eIn case the Corporation  shall enter
into any  consolidation,  merger,  combination or other transaction in which the
shares  of  Common  Stock are  exchanged  for or  changed  into  other  stock or
securities,  cash and/or any other property, then in any such case the shares of
Series D  Preferred  Stock  shall at the same  time be  similarly  exchanged  or
changed  in an  amount  per  share  (subject  to the  provision  for  adjustment
hereinafter sets forth) equal to one hundred (100) times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be,  into  which or for which  each  share of  Common  Stock is  changed  or
exchanged.  In the  event the  Corporation  shall at any time  after the  Rights
Declaration  Date (i) declare any dividend on Common Stock  payable in shares of
Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the  preceding  sentence with respect to the exchange or
change of shares of Series D Preferred  Stock  shall be adjusted by  multiplying
such  amount by a  fraction  the  numerator  of which is the number of shares of
Common Stock  outstanding  immediately  after such event and the  denominator of
which is the number of shares of Common Stock that were outstanding  immediately
prior to such event.

     Section 8. No Redemption.  The shares of Series D Preferred Stock shall not
be redeemable.

      Section 9. Ranking.  The Series D Preferred Stock shall rank junior to all
other series of the Corporation's Preferred Stock as to the payment of dividends
and the  distribution  of  assets,  unless  the terms of any such  series  shall
provide otherwise.

      Section 10. Amendment. The Certificate of Incorporation of the Corporation
shall not be further  amended  in any manner  which  would  materially  alter or
change the powers, preferences or special rights of the Series D Preferred Stock
so as to affect them adversely  without the affirmative vote of the holders of a
majority or more of the outstanding  shares of Series D Preferred Stock,  voting
separately as a class.



<PAGE>



      Section 11.  Fractional  Shares.Series  D Preferred Stock may be issued in
fractions  of a share which shall  entitle the  holder,  in  proportion  to such
holder's  fractional  shares,  to exercise  voting  rights,  receive  dividends,
participate  in  distributions  and to have the  benefit of all other  rights of
holders of Series D Preferred Stock."

      FIFTH: The foregoing amendments to the Certificate of Incorporation of the
Corporation  were  authorized  by a majority  of the Board of  Directors  of the
Corporation  pursuant  to  the  authority  vested  in it by the  Certificate  of
Incorporation and pursuant to Section 502 of the Business Corporation Law of the
State of New York, at a meeting of the Board of Directors  duly held on the 30th
day of March, 1999.

      IN WITNESS  WHEREOF,  the  undersigned  officers of the  Corporation  have
signed  this  Certificate  of  Amendment  this 30th day of March,  1999 and each
affirms that the statements made herein are true under the penalties of perjury.

                                    MARKETSPAN CORPORATION

                                    By: /s/ Craig J. Matthews
                                    ------------------------------------------
                                    Name: Craig J. Matthews
                                    Title: President

                                    By:/s/ Robert R. Wieczorek
                                    --------------------------------------
                                    Name: Robert R. Wieczorek
                                    Title: Vice President, Secretary, Treasurer


<PAGE>




                           CERTIFICATE OF AMENDMENT

                                    OF THE

                         CERTIFICATE OF INCORPORATION

                           OF MARKETSPAN CORPORATION


               Under Section 805 of the Business Corporation Law
                           of the State of New York



      MarketSpan  Corporation,  a corporation  organized and existing  under the
laws of the  State of New York  (the  "Corporation"),  does  hereby  certify  as
follows:

FIRST: The present name of the Corporation is MarketSpan Corporation. The
Corporation was formed under the name "BL Holding Corp."

      SECOND: The Certificate of Incorporation of the Corporation was filed with
the New York Department of State on April 16, 1998. Certificates of Amendment of
the  Certificate  of  Incorporation  were filed with the New York  Department of
State on May 26, 1998, June 1, 1998 and April 7, 1999.

THIRD:  The amendment of the  Certificate of  Incorporation  of the  Corporation
effected by this Certificate of Amendment is as follows:

      Article I relating  to the name of the  Corporation  is amended to read in
its entirety as follows:

                                  "ARTICLE I
                                     NAME

   The name of the corporation (the "Corporation") is KeySpan Corporation."

      FOURTH:  The foregoing  amendment to the certificate of incorporation  was
duly adopted by a majority  vote of the Board of  Directors  of the  Corporation
followed  by vote of a  majority  of all  outstanding  shares  entitled  to vote
thereon at a meeting of shareholders  of the  Corporation  duly held on the 20th
day of May,  1999,  in  accordance  with  Section  803 of the New York  Business
Corporation Law.



<PAGE>




      IN WITNESS  WHEREOF,  the  undersigned  officers of the  Corporation  have
signed this Certificate of Amendment this 20th day of May, 1999 and each affirms
that the statements made herein are true under the penalties of perjury.

                             MARKETSPAN CORPORATION

                             By: /s/ Craig G. Matthews
                             ----------------------------------------------
                             Name: Craig G. Matthews
                             Title:President and Chief Operating Officer


                            By: /s/ Robert R. Wieczorek
                            --------------------------------------------
                            Name: Robert R. Wieczorek
                            Title:Vice President, Secretary and Treasurer



<PAGE>



                           CERTIFICATE OF AMENDMENT

                                    OF THE

                         CERTIFICATE OF INCORPORATION

                           OF MARKETSPAN CORPORATION



               Under Section 805 of the Business Corporation Law
                           of the State of New York







Filer:Brian Nurse, Esq.
      Cullen and Dykman
      177 Montague Street
      Brooklyn, New York 111201-3611