RESTATED ARTICLES OF INCORPORATION
                                       OF
                              APPLIED LASER SYSTEMS


     Asif S. Ahmad and Nagaraj P. Murthy certify that:

     1. They are chief  executive  officer and the secretary,  respectively,  of
APPLIED LASER SYSTEMS, a California corporation.

     2. The articles of incorporation of the corporation, as amended to the date
of the filing of this certificate, including amendments set forth herein but not
separately  filed  (and  with  the  omissions  required  by  Section  910 of the
Corporations Code) are restated as follows:

                                    ARTICLE I

     The name of this Corporation is Applied Laser Systems.

                                   ARTICLE II

     The purpose of this  Corporation is to engage in any lawful act or activity
for which a corporation  may be organized  under the General  Corporation Law of
California,  other than the banking business,  the trust company business or the
practice  of a  profession  permitted  to  be  incorporated  by  the  California
Corporations Code.

                                   ARTICLE III

     a. Shares Authorized

     The  corporation is authorized to issue four classes of shares,  designated
"Preferred  Stock,"  "Class A Common Stock," "Class B Common Stock" and "Class E
Common Stock," respectively.  The number of shares of Preferred Stock authorized
to be  issued  is  5,000,000,  the  number  of  shares  of Class A Common  Stock
authorized  to be issued is  17,000,000,  the number of shares of Class B Common
Stock authorized to be issued is 3,000,000,  and the number of shares of Class E
Common Stock authorized to be issued is 3,000,000.

     b. Preferred Stock

     The Preferred  Stock may be divided into such number of series as the board
of directors  may  determine.  The board of directors is authorized to determine
and alter the rights,  preferences,  privileges and  restrictions  granted to or
imposed  upon any wholly  unissued  series of  Preferred  Stock,  and to fix the
number of shares of any series of  Preferred  Stock and the  designation  of any
such series of Preferred  Stock.  The board of directors,  within the limits and
restrictions  stated in any  resolution or resolutions of the board of directors
originally fixing the number of shares  constituting any series, may increase or
decrease  (but not below the number of shares of such series  then  outstanding)
the  number of shares of any  series  subsequent  to the issue of shares of that
series.

     c. Series A Preferred Stock

     In general.  The  corporation  is authorized to issue  1,500,000  shares of
preferred stock in a series designated  "Series A Preferred Stock." The Series A
Preferred  Stock  has  only  such  rights,  preferences  and  privileges  as are
specifically  set forth in this  Article  III.  Series A Preferred  Stock has no
voting rights.

     Dividends. The Series A Preferred Stock has no right to receive dividends.

     Liquidation  Preference.  In the event of any  liquidation,  dissolution or
winding up of the corporation,  whether voluntary or involuntary,  the holder of
each share of Series A Preferred Stock then outstanding  shall be entitled to be
paid, out of the assets of the  corporation  available for  distribution  to its
shareholders,  whether such assets are capital, surplus or earnings,  before any
payment or declaration and setting apart for payment of any amount shall be made
in respect of any class of the Common Stock,  an amount equal to $1 per share of
Series A Preferred Stock. If upon any liquidation,  dissolution or winding up of
the corporation,  whether voluntary or involuntary, the assets to be distributed
to the  holders  of the Series A  Preferred  Stock of the  corporation  shall be
insufficient to permit the payment to such shareholders of the full preferential
amount  aforesaid,  then all of the assets of the  corporation to be distributed
shall be distributed to the holders of the Series A Preferred Stock,  subject to
the rights,  preferences  and privileges of such further and subsequent  classes
and series of preferred stock as may be outstanding at that time.

     After the payment or  distribution to the holders of the Series A Preferred
Stock of the full preferential  amounts  aforesaid,  the holders of the Series A
Preferred  Stock shall  receive no further  distributions  with  respect to such
shares.

     A  consolidation  or  merger  of the  corporation  with or into  any  other
corporation or corporations or a sale of all or substantially  all of the assets
of the corporation in which the  shareholders of the corporation  receive solely
capital stock of the acquiring  corporation (or of the direct or indirect parent
corporation of the acquiring corporation), except for cash in lieu of fractional
shares,  shall not be deemed a  liquidation,  dissolution,  or winding up of the
corporation as those terms are used in this section III.c.

     Redemption.  The  corporation  shall  redeem the entire  series of Series A
Preferred  Stock promptly  after the following  condition is met: Gross proceeds
from the exercise of the Class B Warrants exceed $15,000,000.

     The board of directors of the  corporation  shall meet and shall  determine
which of its members are disinterested  with respect to redemption of the Series
A  Preferred  Stock,  and such  disinterested  members  shall be  constituted  a
committee  with  authority to elect either of the alternate  forms of redemption
consideration  payable  to the  holders of the Series A  Preferred  Stock.  Such
committee  shall elect to set the  aggregate  redemption  consideration  for the
entire  series of Series A Preferred  Stock at either (a) an amount equal to the
gross  proceeds from the exercise of the Class B Warrants in excess of the first
$15,000,000  up to a maximum of $1,500,000  (the "Excess  Amount");  or (b) that
number of shares of Class A Common Stock equal to the Excess  Amount  divided by
$3.00 per share.

     Alternate Redemption. In the event that the Class B Warrants expire without
the redemption  conditions  above having been satisfied,  the corporation  shall
redeem the entire series of Series A Preferred Stock for aggregate consideration
of $100.

     d. Class A Common Stock

     The Class A Common Stock shall have all rights of shares of the corporation
not  reserved to any other  class.  Upon the  amendment  of this  article,  each
outstanding  share is  converted  into  one-sixth of one share of Class A Common
Stock. The corporation  shall pay to the holders of record the fair value of any
fractional share interests that result, with such fair value to be determined by
resolution of the board of directors.

     e. Class B Common Stock

     In General.  The Class B Common  Stock shall have all of the same rights as
the Class A Common Stock,  except as specifically  provided in this Article III.
On any  matter as to which the Class A Common  Stock is  entitled  to vote,  the
Class A Common  Stock,  the Class B Common  Stock  and the Class E Common  Stock
shall vote as a single class, with each share of Class A Common Stock having one
vote,  and with each  share of Class B Common  Stock or of Class E Common  Stock
having  five  votes.  Whenever  any  Class B Common  Stock is  outstanding,  any
corporate  action,  including  but not limited to any  declaration  of dividends
(whether in cash, securities or other property) distribution,  repurchase, split
or reverse split,  reorganization,  recapitalization,  merger or  consolidation,
liquidation,  or  dissolution  shall affect equally all shares of Class A Common
Stock, and Class B Common Stock, except that any transaction that results in the
holders of Class A Common Stock and Class B Common Stock holding new  securities
with voting  rights,  fixed or  contingent,  shall be effected in such a fashion
that the securities  issuable with respect to each share of Class B Common Stock
shall have five votes for each one vote held by such new voting  securities that
are issuable with respect to each share of Class A Common Stock.

      Conversion  at Option of Holder.  Each share of Class B Common Stock shall
be convertible,  at the option of the holder thereof,  into one share of Class A
Common Stock. A holder of Class B Common Stock desiring to convert shall deliver
the  share  certificate  to the  corporation's  Transfer  Agent  if it has  one,
otherwise to the corporation at its principal executive office, accompanied by a
written request to convert, specifying the number of shares to be converted. The
indorsement of the share certificate and the request to convert shall be in form
satisfactory to the Transfer Agent or the corporation,  as the case may be. Upon
the date of such  delivery  the  conversion  is deemed to have  occurred and the
person entitled to receive share  certificates for Class A Common Stock shall be
regarded for all  corporate  purposes  from and after such date as the holder of
the number of shares of Class A Common  Stock to which he is  entitled  upon the
conversion.

     No Transfers.  No person  holding  shares of Class B Common Stock of record
may  transfer,  and the  corporation  shall not  register  the transfer of, such
shares of Class B Common  Stock,  whether by sale,  assignment,  gift,  bequest,
appointment or otherwise.  Shares of Class B Common Stock shall be registered in
the names of the  beneficial  owners  thereof and not in  "street" or  "nominee"
name.  For this purpose,  a  "beneficial  owner" of any shares of Class B Common
Stock shall mean a person who, or an entity which,  possesses the power,  either
singly or  jointly,  to direct the voting or  disposition  of such  shares.  The
corporation  shall note on the  certificates  for shares of Class B Common Stock
the restrictions on transfer and registration.

     Mandatory  Conversion.  Any purported  transfer of shares of Class B Common
Stock,  including  any  transfer  by  operation  of  law,  shall  result  in the
conversion  of the  transferee's  shares of Class B Common  Stock into shares of
Class A Common Stock, effective the date on which certificates representing such
shares  are  presented  for  transfer  on  the  books  of the  corporation.  The
corporation may, in connection with preparing a list of stockholders entitled to
vote at any meeting of  stockholders,  or as a condition  to the transfer or the
registration  of  shares  of Class B Common  Stock on the  corporation's  books,
require the furnishing of such  affidavits or other proof as it deems  necessary
to establish that any person is the beneficial owner of shares of Class B Stock.

     f. Class E Common Stock

     In General.  The Class E Common  Stock shall have all of the same rights as
the Class A Common Stock,  except as specifically  provided in this Article III.
On any  matter as to which the Class A Common  Stock is  entitled  to vote,  the
Class A Common  Stock,  the Class B Common  Stock  and the Class E Common  Stock
shall vote as a single  class,  with each share of Common Stock having one vote,
and with each share of Class B Common  Stock or of Class E Common  Stock  having
five votes. On liquidation of the corporation each outstanding  share of Class E
Common  Stock  shall  have the same  rights as a share of Class A Common  Stock.
Whenever any Class E Common Stock is outstanding,  any other  corporate  action,
including  but not limited to any  declaration  of  dividends  (whether in cash,
property  or  securities),  distribution,  repurchase,  split or reverse  split,
reorganization,  recapitalization,  merger or  consolidation,  shall also affect
equally all shares of Class A Common Stock and Class E Common Stock, except that
any  transaction  that  results or would result in the holders of Class E Common
Stock holding cash, new securities or other property shall be effected in such a
fashion that the cash, new securities or other property issuable with respect to
each share of Class E Common Stock shall be held in trust by the  corporation or
by such other person as it may appoint, and that any transaction that results in
the  holders  of Class A Common  Stock  and  Class E Common  Stock  holding  new
securities with voting rights, fixed or contingent,  shall be effected in such a
fashion  that the  securities  issuable  with  respect  to each share of Class E
Common  Stock  shall  have five  votes for each one vote held by such new voting
securities that are issuable with respect to each share of Class A Common Stock.
Such trust shall terminate at the  Determination  Date (as defined  below).  Any
earnings on the cash,  new securities or other property held in such trust shall
be added to the corpus  thereof,  which shall be distributed  promptly after the
Determination   Date  to  the  holders  of  Class  E  Common  Stock  as  of  the
Determination  Date, in  proportion  to their  holdings of Class E Common Stock,
except that if none of the Escrow  Conditions (as defined below) shall have been
satisfied  on or  before  the  Determination  Date,  then such  corpus  shall be
distributed or shall revert to the corporation.

     Conversion or Redemption.  The  Determination  Date shall be the earlier to
occur  of (i) the date  any of the  Escrow  Conditions  are  satisfied,  or (ii)
February 15, 1996. The Escrow Conditions shall be

          (i) that the  corporation's  "Income"  (as defined  below)  shall have
     equalled or exceeded  $3,000,000  for the fiscal year ending  September 30,
     1994,

          (ii) that the  corporation's  Income  shall have  equalled or exceeded
     $6,000,000 for the fiscal year ending September 30, 1995,

          (iii) that the "Market Price" (as defined below) of the Class A Common
     Stock, when averaged over any 30 consecutive  trading days all of which are
     less than 18 months after the "Effective  Date" (as defined  below),  shall
     have equalled or exceeded $7.50 per share, or

          (iv) that the Market Price of the Class A Common Stock,  when averaged
     over any 30  consecutive  trading days all of which are less than 36 months
     after the Effective Date, shall have equalled or exceeded $9.35 per share.

     "Income"  shall mean the  corporation's  net income  before  provision  for
income taxes,  exclusive of any earnings that are classified as an extraordinary
item, and inclusive of any charges to income that may result from  conversion of
the  Class  E  Common  Stock  into  Class  B  Common  Stock,  as  stated  in the
corporation's  financial  statements for such fiscal year upon which independent
auditors have given a report,  divided by the average  weighted number of shares
of Common  Stock  (Class A, Class B and Class E)  outstanding  over such  fiscal
year,  and  multiplied by the number that is the sum of (i) the number of shares
of Common Stock (Class A, Class B and Class E) outstanding at the Effective Date
plus (ii) the  number of shares of Common  Stock  sold  under the  "Registration
Statement" (as defined  below) or issued upon exercise,  directly or indirectly,
of the corporation's  securities designated in the Registration Statement as the
Class A Warrants, Class B Warrants or Unit Purchase Option.

     The "Registration Statement" shall mean that certain registration statement
filed by the  corporation  under the  Securities  Act of 1933,  as amended,  and
identified by file number 33-45126 of the United States  Securities and Exchange
Commission.

     The  "Effective  Date"  shall  mean  the  date on  which  the  Registration
Statement  becomes  effective  within the meaning of Section 8 of the Securities
Act of 1933, as amended.

     "Market  Price" shall mean, in order of  preference,  (i) the last reported
sales  price on a  consolidated  transaction  reporting  system,  if the Class A
Common Stock is listed on a national securities exchange or is a National Market
System security quoted on NASDAQ,  (ii) the high closing bid price if such stock
is otherwise quoted on NASDAQ,  or (iii)  otherwise,  a bid price for such stock
determined  by such means as the  corporation's  board of directors  finds to be
reasonable.

     If on the  Determination  Date any of the Escrow Conditions shall have been
satisfied,  then each share of Class E Common Stock shall be converted  into one
share of Class B Common  Stock,  and if on the  Determination  Date  none of the
Escrow  Conditions shall have been satisfied,  then the corporation shall redeem
all outstanding  shares of Class E Common Stock for consideration of $.00001 per
share.  The corporation  shall give notice of redemption,  and upon surrender of
the share certificates shall pay such redemption price to the holders of Class E
Common Stock, but neither the failure to give such notice nor the failure to pay
such  consideration  shall  affect the  rights of the  holders of Class E Common
Stock,  which  from and after the  Determination  Date  shall be  limited to the
following:  (i) in the event that any of the Escrow Conditions were satisfied at
the  Determination  Date,  the right to receive a certificate  representing  the
number of shares of Class B Common  Stock into  which such Class E Common  Stock
was converted, and otherwise to the rights of a holder of such shares of Class B
Common  Stock;  or (ii) in the event  that none of the  Escrow  Conditions  were
satisfied  at the  Determination  Date,  the  right to  receive  the  redemption
consideration  of $.00001 per share  payable  with respect to the Class E Common
Stock (which right may be limited or eliminated by the  application of Chapter 5
of the California General Corporation Law).

     No transfers.  No person  holding  shares of Class E Common Stock of record
may transfer such shares, except by testamentary  disposition or by operation of
law, and any purported  transfer other than as permitted by the preceding clause
shall be ineffective, null and void.

     Shares  of Class E Common  Stock  shall be  registered  in the names of the
beneficial  owners  thereof  and not in  "street" or  "nominee"  name.  For this
purpose, a "beneficial owner" of any shares of Class E Common Stock shall mean a
person who, or an entity which,  possesses the power,  either singly or jointly,
to direct the voting or disposition of such shares.  The corporation  shall note
on the  certificates  for  shares of Class E Common  Stock the  restrictions  on
transfer and registration.

                                    ARTICLE V

     (A) The liability of the directors of this corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.

     (B) The corporation is authorized to provide  indemnification of agents (as
defined  in Section  317 of the  California  Corporations  Code)  through  bylaw
provisions,  agreements  with  agents,  vote of  shareholders  of  disinterested
directors, or otherwise in excess of the indemnification  otherwise permitted by
Section 317 of the  California  Corporations  Code,  subject only to  applicable
limits set forth in Section 204 of the California Corporations Code with respect
to actions for breach of duty to the corporation and its shareholders.

     1. The restated  articles of  incorporation  have been duly approved by the
board of directors.

     2.  The  article  amendments  as  included  in  the  restated  articles  of
incorporation  (other than omissions required by Section 910 of the Corporations
Code)  have been duly  approved  by the  required  vote of the  shareholders  in
accordance with Section 902 of the  Corporations  Code. The corporation has only
one class of shares  and the  number of  outstanding  shares is  6,000,000.  The
number of shares voting in favor of the amendments  equaled or exceeded the vote
required.  The  percentage  vote required for the approval of the amendments was
more than 50%.

     We further  declare under penalty of perjury under the laws of the State of
California  that the matters set forth in this  certificate are true and correct
of our own knowledge.



Dated:  February 24, 1992                         /s/ Asif S. Ahmad
                                                  ------------------------------
                                                  Asif S. Ahmad
                                                  Chief Executive Officer

                                                  /s/ Nagaraj P. Murthy
                                                  ------------------------------
                                                  Nagaraj P. Murthy
                                                  Secretary


<PAGE>

                            CERTIFICATE OF CORRECTION
                                       OF
                       RESTATED ARTICLES OF INCORPORATION
                                       OF
                              APPLIED LASER SYSTEMS


     The undersigned, Asif S. Ahmad and Nagaraj P. Murthy, hereby certify that:

     1. They are the chief  executive  officer and secretary,  respectively,  of
Applied Laser Systems, a California corporation (the "Corporation").

     2. The  instrument  being  corrected  is  entitled  "Restated  Articles  of
Incorporation,"  and said  instrument  was filed with the  Secretary of State of
California on February 25, 1992.

     3.  The  paragraph  under  Article  III.f.  of said  Restated  Articles  of
Incorporation entitled Conversion or Redemption, relating to "Income," is hereby
corrected to read as follows:

          "Income" shall mean the  corporation's net income before provision for
     income  taxes,  exclusive  of  any  earnings  that  are  classified  as  an
     extraordinary  item, and inclusive of any charges to income that may result
     from  conversion of the Class E Common Stock into Class B Common Stock,  as
     stated in the corporation's  financial statements for such fiscal year upon
     which  independent  auditors  have given a report,  divided by the  average
     weighted  number of shares of Common  Stock  (Class A, Class B and Class E)
     outstanding over such fiscal year, and multiplied by the number that is the
     sum of (i) the number of shares of Common Stock (Class A, Class B and Class
     E)  outstanding  at the  Effective  Date plus (ii) the  number of shares of
     Common Stock sold under the  "Registration  Statement" (as defined  below).
     Shares of  Common  Stock  shall  not be deemed to have been sold  under the
     Registration Statement if they are shares issued upon exercise, directly or
     indirectly,  of the corporation's securities designated in the Registration
     Statement  as the  Class A  Warrants,  Class B  Warrants  or Unit  Purchase
     Option.

     4. Said paragraph under Article III.f.  entitled  Conversion or Redemption,
relating  to  "Income,"  as  corrected,  conforms  the  wording of the  Restated
Articles  of  Incorporation  to that  adopted  by the  Board  of  Directors  and
shareholders.

     The undersigned  further declare under penalty of perjury under the laws of
the State of California that the matters set forth in this  certificate are true
and correct of their own knowledge.

Dated:  February 27, 1992                             /s/ Asif S. Ahmad
                                                      --------------------------
                                                      Asif S. Ahmad,
                                                      Chief Executive Officer

                                                      /s/ Nagaraj P. Murthy
                                                      --------------------------
                                                      Nagaraj P. Murthy,
                                                      Secretary

<PAGE>



                           CERTIFICATE OF AMENDMENT TO
                      RESTATED ARTICLES OF INCORPORATION OF
                              APPLIED LASER SYSTEMS


     William C. Patridge and Nagaraj P. Murthy certify that:

     1. They are the  President  and  Secretary,  respectively  of Applied Laser
Systems, a California corporation.

     2.  Section a. of Article  III of the  corporation's  Restated  Articles of
Incorporation is amended to read as follows:

                                   ARTICLE III

     a. Shares Authorized

     The  corporation is authorized to issue four classes of shares,  designated
"Preferred  Stock,"  "Class A Common Stock," "Class B Common Stock" and "Class E
Common Stock," respectively.  The number of shares of Preferred Stock authorized
to be  issued  is  5,000,000,  the  number  of  shares  of Class A Common  Stock
authorized  to be issued is  37,000,000,  the number of shares of Class B Common
Stock authorized to be issued is 3,000,000,  and the number of shares of Class E
Common Stock authorized to be issued is 3,000,000."

     3. The first  paragraph  of Section d. of Article  III,  entitled  "Class B
Common Stock," is amended to read as follows:

     d. Class B Common Stock

     In General.  The Class B Common  Stock shall have all of the same rights as
the Class A Common Stock,  except as specifically  provided in this Article III.
On any  matter as to which the Class A Common  Stock is  entitled  to vote,  the
Class A Common  Stock,  the Class B Common  Stock  and the Class E Common  Stock
shall vote as a single class,  with each share of Class A Common Stock,  Class B
Common  Stock and Class E Common  Stock  having one vote.  Whenever  any Class B
Common Stock is outstanding,  any corporate action, including but not limited to
any declaration of dividends  (whether in cash,  securities or other  property),
distribution,    repurchase,    split   or   reverse   split,    reorganization,
recapitalization,  merger or  consolidation,  liquidation,  or dissolution shall
affect equally all shares of Class A Common Stock and Class B Common Stock."

     4. The first  paragraph  of Section f. of Article III is amended to read as
follows:

     f. Class E Common Stock

     In General.  The Class E Common  Stock shall have all of the same rights as
the Class A Common Stock,  except as specifically  provided in this Article III.
On any  matter as to which the Class A Common  Stock is  entitled  to vote,  the
Class A Common  Stock,  the Class B Common  Stock  and the Class E Common  Stock
shall vote as a single class,  with each share of Class A Common Stock,  Class B
Common  Stock and Class E Common Stock having one vote.  On  liquidation  of the
corporation each  outstanding  share of Class E Common Stock shall have the same
rights as a share of Class A Common Stock.  Whenever any Class E Common Stock is
outstanding,  any other  corporate  action,  including  but not  limited  to any
declaration   of   dividends   (whether  in  cash,   property  or   securities),
distribution,    repurchase,    split   or   reverse   split,    reorganization,
recapitalization,  merger or consolidation, shall also affect equally all shares
of Class A Common Stock and Class E Common  Stock,  except that any  transaction
that  results or would  result in the  holders of Class E Common  Stock  holding
cash,  new securities or other property shall be effected in such a fashion that
the cash, new  securities or other property  issuable with respect to each share
of Class E Common  Stock  shall be held in trust by the  corporation  or by such
other person as it may appoint.  Such trust shall terminate at the Determination
Date (as defined  below).  Any  earnings on the cash,  new  securities  or other
property held in such trust shall be added to the corpus thereof, which shall be
distributed  promptly  after the  Determination  Date to the  holders of Class E
Common Stock as of the  Determination  Date, in proportion to their  holdings of
Class E Common Stock,  except that if none of the Escrow  Conditions (as defined
below) shall have been satisfied on or before the Determination  Date, then such
corpus shall be distributed or shall revert to the corporation."

     3. The foregoing  amendment to the Restated  Articles of Incorporation  has
been duly approved by the board of directors.

     4. The foregoing  amendment to the Restated  Articles of Incorporation  has
been duly  approved by the required  vote of  shareholders  in  accordance  with
Section 902 of the Corporations  Code. The total number of outstanding shares of
the corporation is 2,780,833  shares of Class A Common Stock,  979,167 shares of
Class B Common Stock,  and 2,000,000  shares of Class E Common Stock. The number
of  shares  voting  in favor  of the  amendment  equaled  or  exceeded  the vote
required. The percentage vote required was more than 50%.

     We further  declare under penalty of perjury under the laws of the State of
California  that the matters set forth in this  certificate are true and correct
of our own knowledge.


Dated:  August 27, 1993

                                                  /s/ William C. Patridge
                                                  ------------------------------
                                                  William C. Patridge, President

                                                  /s/ Nagaraj P. Murthy
                                                  ------------------------------
                                                  Nagaraj P. Murthy, Secretary


<PAGE>



                           CERTIFICATE OF AMENDMENT TO
                      RESTATED ARTICLES OF INCORPORATION OF
                              APPLIED LASER SYSTEMS


     William J. Young and Alan R. Steel certify that:

     1. They are the  President  and  Secretary,  respectively  of Applied Laser
Systems, a California corporation.

     2.  Section a. of Article  III of the  corporation's  Restated  Articles of
Incorporation is amended to read as follows:


                                  ARTICLE III

     a. Shares Authorized

     The  corporation is authorized to issue four classes of shares,  designated
"Preferred  Stock,"  "Class A Common Stock," "Class B Common Stock" and "Class E
Common Stock," respectively.  The number of shares of Preferred Stock authorized
to be  issued  is  5,000,000,  the  number  of  shares  of Class A Common  Stock
authorized  to be issued is  60,000,000,  the number of shares of Class B Common
Stock authorized to be issued is 3,000,000,  and the number of shares of Class E
Common Stock authorized to be issued is 3,000,000."

     3. The foregoing  amendment to the Restated  Articles of Incorporation  has
been duly approved by the board of directors.

     4. The foregoing  amendment to the Restated  Articles of Incorporation  has
been duly  approved by the required  vote of  shareholders  in  accordance  with
Section 902 of the Corporations  Code. The total number of outstanding shares of
the corporation is 9,307,456  shares of Class A Common Stock,  717,872 shares of
Class B Common Stock,  and 497,094 shares of Class E Common Stock. The number of
shares voting in favor of the amendment  equaled or exceeded the vote  required.
The percentage vote required was more than 50% of the outstanding shares.

     We further  declare under penalty of perjury under the laws of the State of
California  that the matters set forth in this  certificate are true and correct
of our own knowledge.


Dated:  December 12, 1994

                                                  /s/ William J. Young
                                                  ------------------------------
                                                  William J. Young, President

                                                  /s/ Alan R. Steel
                                                  ------------------------------
                                                  Alan R. Steel, Secretary


<PAGE>



                            CERTIFICATE OF OWNERSHIP


     William J. Young and Alan R. Steel certify that:

     1. They are the President and the Secretary, respectively, of Applied Laser
Systems, a California corporation.

     2. This  corporation  owns all the  outstanding  shares of ARC  Capital,  a
California corporation.

     3. The board of directors of this  corporation,  in accordance with Section
1110(a) of the California Corporations Code, has duly adopted the Plan of Merger
attached hereto as Exhibit A.

     4. The board of  directors  of ARC  Capital  has duly  adopted  the Plan of
Merger attached hereto as Exhibit A.

     We further  declare under penalty of perjury under the laws of the State of
California  that the matters set forth in this  certificate are true and correct
of our own knowledge.



Dated:  October 6, 1995                           /s/ William J. Young
                                                  ------------------------------
                                                  William J. Young, President


                                                  /s/ Alan R. Steel
                                                  ------------------------------
                                                  Alan R. Steel, Secretary


<PAGE>



                                    EXHIBIT A

                                 PLAN OF MERGER


     Plan of Merger  (this  "Plan")  of  Applied  Laser  Systems,  a  California
corporation  ("Parent"),   and  ARC  Capital,  Inc.,  a  California  corporation
("Subsidiary").

     1. Parent has  acquired and owns all of the  outstanding  shares of capital
stock of Subsidiary.

     2. The Board of Directors of Parent, in accordance with Section 1110 of the
California  Corporations  Code,  has  approved  the  merger  (the  "Merger")  of
Subsidiary with and into Parent upon the terms set forth in this Plan.

     3.  Subsidiary  shall  merge with and into  Parent,  with  Parent to be the
corporation surviving the Merger (the "Surviving Corporation").

     4. Upon the Merger,  the separate  existence of Subsidiary shall cease, the
Surviving   Corporation   shall  succeed  to  and  assume  all  liabilities  and
obligations of Parent and Subsidiary,  and the effect of the Merger shall in all
other respects be as provided herein. The Surviving Corporation may, at any time
after the  Merger,  take any action  (including  executing  and  delivering  any
document) in the name and on behalf of either  Parent or  Subsidiary in order to
carry out and effectuate the transactions contemplated by this Plan.

     5. Upon the Merger,  each  outstanding  share of common stock of Subsidiary
shall be cancelled.

     6. The Articles of Incorporation of Parent in effect  immediately  prior to
the Merger shall be the Articles of Incorporation  of the Surviving  Corporation
until amended in accordance with the provisions  thereof,  except that Article I
of the Articles of  Incorporation of Surviving  Corporation  shall be amended to
read as follows:


                                       "I

                  The name of the corporation is ARC Capital."


<PAGE>



                            CERTIFICATE OF OWNERSHIP


     William J. Young and Alan R. Steel certify that:

     1. They are the President and the Secretary,  respectively, of ARC Capital,
Inc., a California corporation.

     2. This  corporation  owns all the outstanding  shares of Advanced  Machine
Vision Corporation, a California corporation.

     3. The board of directors of this  corporation,  in accordance with Section
1110(a) of the California Corporations Code, has duly adopted the Plan of Merger
attached hereto as Exhibit A.

     4. The board of directors of Advanced  Machine Vision  Corporation has duly
adopted the Plan of Merger attached hereto as Exhibit A.

     We further  declare under penalty of perjury under the laws of the State of
California  that the matters set forth in this  certificate are true and correct
of our own knowledge.



Dated:  October 6, 1995                           /s/ William J. Young
                                                  ------------------------------
                                                  William J. Young, President


                                                  /s/ Alan R. Steel
                                                  ------------------------------
                                                  Alan R. Steel, Secretary


<PAGE>



                                    EXHIBIT A

                                 PLAN OF MERGER


     Plan of Merger (this "Plan") of ARC Capital, Inc., a California corporation
("Parent"),  and Advanced Machine Vision Corporation,  a California  corporation
("Subsidiary").

     1. Parent has  acquired and owns all of the  outstanding  shares of capital
stock of Subsidiary.

     2. The Board of Directors of Parent,  in accordance with Section 1110(a) of
the  California  Corporations  Code,  has approved the merger (the  "Merger") of
Subsidiary with and into Parent upon the terms set forth in this Plan.

     3.  Subsidiary  shall  merge with and into  Parent,  with  Parent to be the
corporation surviving the Merger (the "Surviving Corporation").

     4. Upon the Merger,  the separate  existence of Subsidiary shall cease, the
Surviving   Corporation   shall  succeed  to  and  assume  all  liabilities  and
obligations of Parent and Subsidiary,  and the effect of the Merger shall in all
other respects be as provided herein. The Surviving Corporation may, at any time
after the  Merger,  take any action  (including  executing  and  delivering  any
document) in the name and on behalf of either  Parent or  Subsidiary in order to
carry out and effectuate the transactions contemplated by this Plan.

     5. Upon the Merger,  each  outstanding  share of common stock of Subsidiary
shall be cancelled.

     6. The Articles of Incorporation of Parent in effect  immediately  prior to
the Merger shall be the Articles of Incorporation  of the Surviving  Corporation
until amended in accordance with the provisions  thereof,  except that Article I
of the Articles of  Incorporation of Surviving  Corporation  shall be amended to
read as follows:

                                       "I

      The name of the corporation is Advanced Machine Vision Corporation."