KANEB SERVICES, INC.

                                     BYLAWS

                                    Article I

                                  Stockholders

         Section 1. Place of Holding Meetings:  All meetings of the stockholders
shall be held at the principal office of the Corporation outside of the State of
Delaware,  or at such other  place  within or without  the State of  Delaware as
shall be specified or fixed in the notices or waivers of notice thereof.

         Section 2. Quorum;  Adjournment of Meetings:  The presence in person or
by proxy of stockholders entitled to cast a majority in number of votes shall be
necessary  to  constitute a quorum at all  meetings of the  stockholders  unless
otherwise provided by law or by the certificate of incorporation. If less than a
quorum shall be in  attendance at the time for which the meeting shall have been
called,  the meeting may, after the lapse of at least half an hour, be adjourned
from time to time by vote of the  stockholders  holding a majority of the issued
and outstanding shares of the capital stock of the Corporation  entitled to vote
who are  present  in  person  or by proxy  at such  meeting,  for a  period  not
exceeding  one month for any one  adjournment,  without any notice or call other
than by  announcement at the meeting of the time and place 6f the holding of the
adjourned  meeting,  until a quorum  shall  attend.  Any meeting or  adjournment
thereof at which a quorum is present may also be  adjourned  by a like  majority
vote,  for such time without  notice or call, or upon such notice or call as may
be determined by such majority vote. At any adjourned  meeting at which a quorum
shall  be  present,  any  business  may be  transacted  which  might  have  been
transacted if the meeting had been held as originally called.

         Section 3. State Annual  Meetings;  Election of  Directors:  The annual
meeting of  stockholders  for the election of directors -and the  transaction of
general  business  shall be held at ten o'clock  (10:00) in the  forenoon on the
fourth  Monday  in  April  in  each  year,  or on  such  other  date  as  may be
appropriately selected by the Board of Directors. If this date shall fall upon a
legal holiday, the meeting shall be held on the next succeeding business day not
a legal holiday.  At each annual meeting the stockholders shall elect a board of
directors, and they may transact as any other business -within the powers of the
Corporation  as may come  before -the  meeting  without  special  notice of such
business.

         Section 4. Special Meetings:  Special Meetings of -the stockholders for
any  purpose  or  purposes  may be  called at any time in the  interval  between
regular meetings by the President or by a majority of the board of directors, or
by a majority of the executive c6mmittee,  and shall be called by the President,
Secretary or a director upon a request in writing therefor,  stating the purpose
or  purposes of the  meeting,  delivered  to the  President,  Secretary  or such
director,  signed by the holders of one-fifth of all the shares  outstanding and
entitled to vote.

         Section  5.  Notice of  Stockholders  Meetings:  A written  or  printed
notice,  stating  the  place,  day and hour of the  meeting,  and,  in case of a
special meeting, the business proposed to be transacted thereat,  shall be given
by the Secretary to each stockholder entitled to vote thereat by delivering such
notice to him  personally or by mailing it postage  prepaid and addressed to him
at his  address as it appears  upon the books of the  Corporation,  at least ten
(10) days prior to the meeting.  No business  shall be transacted at any special
meeting except that referred to in the notice.

         Section 6.  Voting;  Elections;  Inspectors;  Votes by  Ballot:  At all
meetings of stockholders,  every  stockholder of record of any class entitled to
vote thereat  shall have one vote for each share of full paid and  nonassessable
stock  standing in his name on the books of the  Corporation on the date for the
determination of stockholders entitled to vote at such meeting, either in person
or by proxy appointed by instrument in writing subscribed by such stockholder or
his duly  authorized  attorney.  All  elections  shall be had and all  questions
decided by a  majority  vote of the votes  cast at a duly  constituted  meeting,
except  as  otherwise  provided  for in these  bylaws or in the  certificate  of
incorporation  or  by  some  specific   statutory   provision   superseding  the
restrictions  and  limitations  contained  in the bylaws or the  certificate  of
incorporation.

         At any election of directors, the chairman of the meeting may, and upon
the  request  of the  holders  of ten  percent  (l0%) of the stock  present  and
entitled to vote at such election shall,  appoint two inspectors of election who
shall  subscribe  an oath or  affirmation  to execute  faithfully  the duties of
inspectors at such election with strict  impartiality  and according to the best
of their ability and shall canvass the votes and make and sign a certificate  of
the result  thereof.  No candidate for the office of director shall be appointed
as such inspector.  The chairman of the meeting may cause a vote by ballot to be
taken upon any  election or matter,  and such vote by ballot shall be taken upon
the  request  of the  holders  of ten  percent  (l0%) of the stock  present  and
entitled to vote on such election or matter.

         Section 7.  Conduct of  Stockholders'  Meetings:  The  meetings  of the
stockholders  shall be presided  over by the Chairman of the Board,  or if he is
not present,  by the President,  or if he is not present, by a Vice President or
if neither the Chairman of the Board, President nor a Vice President is present,
by a chairman  elected at the  meeting.  The  Secretary of the  Corporation,  if
present,  shall act as secretary of such meetings,  or if he is not present,  an
Assistant  Secretary  shall so act; if neither the  Secretary  nor an  Assistant
Secretary is present, then a secretary shall be appointed by the chairman of the
meeting. The order of business shall be as follows:

         (a) calling of meeting to order

         (b) election of a chairman  and the  appointment  of a  secretary,  if
         necessary

         (c) presentation of proof of the due calling of the meeting

         (d) presentation and examination of proxies

         (e) reading and settlement of the minutes of the previous meeting

         (f) reports of officers  and  committees

         (g) the election of directors and officers,  if an annual meeting, or a
         meeting called for that purpose

         (h) unfinished business

         (i) new business

         (j) adjournment.

         Section 8. Validity of Proxies;  Ballots; Etc.: At every meeting of the
stockholders,  all  proxies  shall be  received  and  taken in charge of and all
ballots  shall be received  and  canvassed  by the  secretary of the meeting who
shall decide all questions touching the qualification of voters, the validity of
the proxies,  and the  acceptance  or rejection of votes,  unless  inspectors of
election  shall have been  appointed by the  chairman of the  meeting,  in which
event such inspectors of election shall decide all such questions.

                                   Article II

                                    Directors

           Section 1. Election of Directors; Terms of Office: At all meetings of
the stockholders for the election of directors at which a quorum is present, the
persons  receiving  the greatest  number of votes shall be the  directors.  Each
director of the  Corporation  shall hold office until the next annual meeting of
the stockholders and thereafter until his successor shall have been duly elected
and shall have  qualified,  or until he shall resign or be removed in accordance
with the provisions of these bylaws.

           Section 2. First Meeting:  The newly elected directors may hold their
first meeting for the purpose of  organization  and the transaction of business,
if  a  quorum  be  present,   immediately   after  the  annual  meeting  of  the
stockholders;  or the time and place of such  meeting may be fixed by consent in
writing of all the directors.

         Section 3. Regular Meetings: Regular meetings of the board of directors
may be held without notice at such places and times as may be fixed from time to
time by resolution of the board.

           Section 4. Special Meetings;  How Called; Notice: Special meetings of
the board of directors may be called by the President or, on the written request
of any two  directors,  by the Secretary,  in each case on at least  twenty-four
(24) hours written or printed or  telegraphic,  cable or wireless notice to each
director.  Such notice,  or any waiver thereof  pursuant to Section 2 of Article
VIII hereof,  need not state the purpose or purposes of such meeting,  except as
may  otherwise be required by law, by the  certificate  of  incorporation  or in
these bylaws.

          Section 5. Place of Meeting;  Order of Business The directors may hold
their meetings, have one or more offices, and keep the books of the corporation,
outside the State of Delaware,  at any office or offices of the corporation,  or
at any other place,  as they may from time to time by resolution  determine.  At
all  meetings of the board of directors  business  shall be  transacted  in such
order as shall from time to time be determined by resolution of the board.

          Section  6.  Number and  Quorum:  The  business  and  property  of the
corporation  shall be conducted  and managed by a board  consisting  of not less
than  five (5) nor more  than  sixteen  (16)  directors,  none of whom need be a
stockholder  of the  corporation.  A  majority  of the  members  of the board of
directors shall  constitute a quorum for the transaction of business.  The board
of  directors  of the  corporation  shall  initially  be  composed  of  six  (6)
directors,  but the board may at any time be  increased to not more than sixteen
(16) or decreased to not less than five(5) by the stockholders at any regular or
special meeting of the stockholders1 or by the board of directors as provided in
Section 7 of this Article,  provided  that the number of directors  constituting
the board shall in no case be decreased  below the number then in office  except
in connection  with the removal of a director  under the provisions of Section 9
of this Article II. A majority of the  directors  shall  constitute a quorum for
the transaction of business.

         Section 7.  Increase or Decrease  of Number of  Directors:  Any time or
from time to time at a special  meeting  called  for the  purpose,  the board of
directors  may increase the number of directors of the  corporation  to not more
than  sixteen (16) or decrease the number of directors to not less than five (5)
and at any such meeting at which the board is  increased,  or at any  subsequent
special  meeting  called  for the  purpose  and held  prior  to the next  annual
election,  the board, by the vote of a majority of the board then in office, may
fill the vacancies created by any such increase in the number of directors.  The
additional  directors so chosen shall hold office until the next annual election
and until their successors are elected and shall qualify.

         Section 8.  Resignations:  Any director or member of the  committee may
resign at any time.  Such  resignation  shall be made in writing  and shall take
effect at the time specified there in, and if no time be specified,  at the time
of its receipt by the  president or Secretary.  The  acceptance of a resignation
shall not be necessary to make it effective.

         Section  9:  Removal  of  Directors:   At  a  special  meeting  of  the
stockholders called and held for such purpose;  any director may; by a vote of a
majority of all of the shares of stock  outstanding  and  entitled  to vote,  be
removed  from  office  and  another be  appointed  in the place of the person so
removed, to serve for the remainder of his term.

         Section 10: Filling of Vacancies: Subject to the provisions of Sections
7 and 9 of this Article, if the office of any director,  member of the executive
committee,  or other  office  becomes  vacant,  a majority of the  directors  in
office; if more than a quorum,  or if less than a quorum,  then the directors in
office,  may appoint any qualified  person to fill such vacancy,  who shall hold
office for the un-expired  term and until his successor shall be duly chosen and
shall qualify.

         Section 11. Powers of Directors:  The board of directors shall exercise
all of the powers of the Corporation subject to the restrictions  imposed by law
by the certificate of incorporation, or by these bylaws. The directors shall act
only as a board and the individual directors shall have no power as such.

         Section 12. Compensation of Directors:  The directors may be paid their
expenses,  if any, of  attendance  at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director from
serving  the  Corporation  in any  other  capacity  and  receiving  compensation
therefor.  Members  of  special  or  standing  committees  may be  allowed  like
compensation for attending committee meetings.

         Section  13.   Approval  or   Ratification  of  Acts  or  Contracts  by
Stockholders:  The board of  directors in its  discretion  may submit any act or
contract for approval or ratification at any annual meeting of the stockholders,
or at any  special  meeting  of the  stockholders  called  for  the  purpose  of
considering  any such act or  contract,  and any act or  contract  that shall be
approved or be ratified  by the vote of the  stockholders  holding a majority of
the  issued  and  outstanding  shares of the  capital  stock of the  Corporation
entitled  to vote and  present in person or by proxy at such  meeting  (provided
that a quorum be present), shall be as valid and as binding upon the Corporation
and upon all the  stockholders  as if it has been  approved or ratified by every
stockholder of the Corporation.

                                   Article III

                                   Committees

           Section 1. Executive Committee;  Designation: The board of directors,
by a resolution  passed by a majority of the whole board,  may  designate two or
more of its members to constitute an executive committee,  each member of which,
unless otherwise  determined by the board, shall continue to be a member thereof
until the expiration of his term of office as a director.

           Section 2. Bowers:  During the intervals  between the meetings of the
board of directors,  the executive  committee shall have, and may exercise,  all
the powers of the board of  directors  in the  management  of the  business  and
affairs of the Corporation, in such manner as the executive committee shall deem
best for the  interests  of the  Corporation,  in all  cases  in which  specific
directions shall not have been given by the board of directors.

           All action by the executive  committee shall be reported to the board
of directors at its meeting next succeeding such action, and shall be subject to
revision or  alteration  by the board of  directors;  provided that no rights or
acts of third parties shall be affected by any such revision or alteration.

           Section 3. Procedure; Meetings; Quorum: The executive committee shall
choose its own chairman and secretary, shall fix its own rules of procedure, and
shall meet at such times and at such place or places as may be  provided by such
rules, or by resolution of the executive committee or of the board of directors.
At every  meeting of the  executive  committee the presence of a majority of all
the  members  thereof  shall  be  necessary  to  constitute  a  quorum  and  the
affirmative vote of a majority of the members present shall be necessary for the
adoption by it of any resolution.

           Section 4. Other  Committees:  The board of directors,  by resolution
passed by a majority of the whole board,  may designate  members of the board to
constitute other committees,  which shall in each case consist of such number of
directors, not less than two, and shall have and may exercise such powers as the
board may determine and specify in the respective resolutions appointing them. A
majority of all the members of any such  committee  may determine its action and
fix the time and place of its  meetings,  unless  the board of  directors  shall
otherwise provide. The board of directors shall have power at any time to change
the number,  subject as aforesaid,  and members of any such  committee,  to fill
vacancies, and to discharge any such committee.

                                   Article IV

                                    Officers

         Section  1.  Officers:  The  officers  of the  Corporation  shall  be a
Chairman of the Board, a President, one or more Vice Presidents, a Treasurer and
a Secretary, all of whom shall be elected by the board of directors.

         The board of directors or the  executive  committee  may appoint one or
more Assistant  Treasurers,  one or more Assistant  Secretaries,  and such other
officers as they,  or either of them,  may deem  necessary,  who shall have such
authority  and shall  perform such duties as from time to time may be prescribed
by the board of directors or the executive  committee.  Any two offices,  except
those of President and Secretary may be held by the same persons.

         Section  2.  President:  The  President  shall be the  chief  executive
officer of the Corporation.  He shall have general  supervision of the business,
affairs  and  property  of the  Corporation,  and of its  officers  and  agents,
subject,  however, to the control of the board of directors and of the executive
committee.  He may agree upon, execute and deliver all authorized bonds,  notes,
contracts,  agreements or other  obligations  or  instruments in the name of the
Corporation,  and with the Treasurer or an Assistant  Treasurer or the Secretary
or an Assistant Secretary may execute and deliver all certificates for shares of
capital  stock of the  Corporation  and any  warrants  evidencing  the  right to
subscribe to shares of the capital stock of the  Corporation  He shall  annually
prepare a full and true statement of the affairs of the Corporation  which shall
be submitted at the annual meeting of stockholders.

         Section 3.  Chairman  of the Board:  The  Chairman  of the Board  shall
preside at all meetings of the  stockholders  and of the board of directors  and
shall have such other  powers and duties as  designated  in these  bylaws and as
from time to time may be assigned to him by the board of directors.

         Section 4. Vice Presidents:  At the request of the President, or in his
absence or disability or failure to act, a Vice President shall have and perform
all the duties of the President,  and, when so acting, shall have all the powers
of and be subject to all  restrictions  upon the  President.  Any Vice President
(unless otherwise provided by resolutions of the board of directors or executive
committee)  may  execute and deliver all  authorized  bonds,  notes,  contracts,
agreements or other  obligations or instruments in the name of the  Corporation,
and with  the  Secretary  or an  Assistant  Secretary,  or the  Treasurer  or an
Assistant  Treasurer,  may sign all  certificates for shares of capital stock of
the Corporation and any warrants  evidencing the right to subscribe to shares of
capital  stock of the  Corporation.  Each Vice  President  shall have such other
powers and shall  perform  such other  duties as may be  assigned  to him by the
board of directors, the executive committee or by the President.

          Section 5.  Treasurer:  The  Treasurer  shall have the  custody of all
funds, securities, evidences of indebtedness and other valuable documents of the
Corporation;  he shall  receive  and give or cause  to be  given,  receipts  and
acceptances for moneys paid in on account of the Corporation,  and shall pay out
of the funds on hand all just debts of the  Corporation of whatever  nature upon
maturity of the same;  he shall enter or cause to be entered in the books of the
Corporation to be kept for that purpose full and accurate accounts of all moneys
received and paid out on account of the Corporation and whenever required by the
board of directors,  the executive committee or the President, he shall render a
statement  of his cash  accounts;  he may  sign  with  the  President  or a Vice
President  any or all  certificates  for  shares  of the  capital  stock  of the
Corporation and any warrants  evidencing the right to subscribe to shares of the
capital  stock of the  Corporation;  and in general he shall perform all. of the
other duties incident to the office 6f Treasurer and such other duties as may be
assigned  to him by the  board of  directors,  the  executive  committee  or the
President.

          Section 6. Assistant  Treasurer:  At the request of the Treasurer,  in
his  absence or  disability  or failure to act,  an  Assistant  Treasurer  shall
perform all the duties of the Treasurer,  and when so acting, shall have all the
powers of,  and be subject to all the  restrictions  upon,  the  Treasurer.  The
Assistant Treasurers shall perform such 6ther duties as from time to time may be
assigned to them by the President,  the Treasurer, the board of directors or the
executive committee.

          Section 7. The Secretary: The Secretary shall be sworn to the faithful
discharge  of his duties;  shall keep or cause to be kept in books  provided for
the  purpose the minutes of all  meetings of the  stockholders,  of the board of
directors  and of the executive  committee;  shall see that all notices are duly
given in accordance  with the provisions of these bylaws and as required by law;
shall be  custodian  of the records and of the seal of the  Corporation  and see
that the seal is affixed to all  documents,  the execution and delivery of which
on behalf of the  Corporation  under its seal are duly  authorized in accordance
with the  provisions of these  bylaws;  shall keep a register of the post office
address  of each  stockholder,  and make all proper  changes  in such  register,
retaining  and  filing his  authority  for all such  entries;  may sign with the
President or a Vice President any and all certificates for shares of the capital
stock of the Corporation  and any warrants  evidencing the right to subscribe to
shares  of the  capital  stock of the  Corporation;  shall  see that the  books,
reports,  statements,  certificates and all other documents and records required
by law are properly kept and filed;  and in general the Secretary  shall perform
all duties  incident to the office of  Secretary  and such other  duties as may,
from time to time, be assigned to him by the board of  directors,  the executive
committee, or the President.

         Section 8. Assistant Secretaries: At the request of the Secretary or in
his  absence or  disability  or fai1ure to act;  an  Assistant  Secretary  shall
perform all the duties of the Secretary and, when so acting,  shall have all the
powers of,  and be subject  to, all the  restrictions  upon the  Secretary.  The
Assistant  Secretaries  shall perform such other duties as from time to time may
be assigned to them by the President,  the Secretary,  the board of directors or
the executive committee.

         Section 9. Salaries: The salaries or other compensation of the officers
shall be fixed from time to time by the board of directors) and no officer shall
be prevented from receiving such salary or other  compensation  by reason of the
fact that he is also a director of the Corporation.

         Section 10 Removal of Officers: Any officer may removed, either with or
without  cause,  by the vote of a majority of the whole board of  directors at a
special  meeting called for the purpose) or at any regular meeting of the board,
provided the notice for such meeting  shall  specify that the matter of any such
proposed removal will be considered at the meeting.

                                    Article V

                                  Capital Stock

         Section 1.  Certificates  of Stock:  Vice  President  shall cause to be
issued  one or more  certificates  under  the  seal to each  stockholder  of the
Corporation and signed by the President or a Vice President and the Secretary or
an Assistant  Secretary or the Treasurer or an Assistant  Treasurer,  certifying
the number of shares (and, if the stock of the Corporation shall be divided into
classes,  the class or classes of such shares) owned by such  stockholder in the
Corporation;  provided,  however,  that if any certificate  shall be signed by a
transfer agent, or by a transfer clerk and registrar,  appointed by the board of
directors for the purpose,  the signatures of the officers of the Corporation on
the  certificate  may be  facsimile.  The stock record books and the blank stock
certificate  books  shall be kept by the  Secretary,  or at the  Office  of such
transfer  agent or transfer  agents as the board of directors  or the  executive
committee  may from time to time by resolution  determine.  In case any officers
who shall have signed,  or whose  facsimile  signature or signatures  shall have
been  used on,  any such  certificate  or  certificates  shall  cease to be such
officer or officers, whether because of death, resignation or otherwise,  before
such  certificate or certificates  shall have been delivered by the Corporation,
such certificate or certificates may nevertheless be issued and delivered by the
Corporation  as though the person or persons  who  signed  such  certificate  or
certificates  or whose  facsimile  signature or signatures  shall have been used
thereon had not ceased to be such officer or officers.

          Section 2. Transfer of Shares:  The shares of stock of the Corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old  certificates  shall be surrendered  to the  Corporation by the delivery
thereof to the  Secretary or the  transfer  agent for said shares of stock or to
such  other  person as the board of  directors  may  designate  by whom such old
certificates shall be cancelled, and new certificates shall thereupon be issued.

A record shall be made of each transfer.

         Section 3. Record Date: In order that the Corporation may determine the
stockholders  entitled to notice of or to vote at any meeting of stockholders or
any  adjournment  thereof or to express  consent to corporate  action in writing
without a meeting,  or  entitled  to receive  payment of any  dividend  or other
distribution  or allotment of any rights,  or entitled to exercise any rights in
respect to any change  conversion or exchange of stock or for the purpose of any
other lawful action,  the board of directors may fix, in advance, a record date,
which shall not be more than sixty or less than ten days before the date of such
meeting,  nor more than sixty days prior to any other action. A determination of
stockholders  of  record  entitled  to  notice  of or to  vote at a  meeting  of
stockholders shall apply to any adjournment of the meeting;  provided,  however,
that the board of directors may fix a new record date for the adjourned meeting.

         Section 4.  Dividends:  The  directors may declare  dividends  from the
surplus  or net  profits  of the  Corporation  as and when they deem  expedient.
Before  declaring  any  dividend  there may be  reserved  out of  surplus or net
profits such sum or sums as the directors from time to time in their  discretion
think proper for working capital or as a reserve fund to meet  contingencies  or
for  equalizing  dividends,  or for such other  purposes as the directors  shall
think conducive to the interest of the Corporation.

         Section 5. Lost or Destroyed Certificates:The board of directors or the
executive committee may determine the conditions upon which a new certificate of
stock may be issued in place of a certificate which is alleged to have been lost
or  destroyed;  and  may,  in  their  discretion,  require  the  owner  of  such
certificate or his legal representative to give bond, with sufficient surety, to
indemnify the  Corporation and each transfer agent against any and all losses or
claims which may arise by reason of the issue of a new  certificate in the place
of the one so lost or destroyed.

                                   Article VI

                                 Corporate Seal

          The board of directors shall provide a corporate seal,  which shall be
in the form of a circle,  shall include the name of the  Corporation and year of
its  incorporation  and shall  otherwise be in such form as shall be approved by
the board of directors.

                                   Article VII

                         Contracts, Notes, Checks, Etc.

         Section 1. Execution of Contracts:  The board of directors or executive
committee may authorize  any officer or officers,  agent or agents,  in the name
and on behalf of the  Corporation,  to enter into any  contract  or execute  and
deliver  any  instrument,  and such  authority  may be  general or  confined  to
specific  instances;  and unless so  authorized by the board of directors or the
executive committee or expressly authorized by these bylaws, no officer or agent
or employee  shall have any power or  authority to bind the  Corporation  by any
contract or other undertaking or to render it liable for the payment of money or
to subject it to any other obligation.

         Section 2. Execution of Notes,  Checks, Etc.: All notes, bonds or other
certificates  or evidence of indebtedness  of the  Corporation,  and all checks,
drafts,  notes and other orders for the payment of money out of the funds of the
Corporation shall be signed on behalf of the Corporation in such manner as shall
from time to time be  determined  by resolution of the board of directors or the
executive committee.

                                  Article VIII

                            Miscellaneous Provisions

         Section 1. Fiscal Year: The fiscal year of the Corporation shall be the
calendar year.

         Section 2.  Notice and  Waiver of  Notice:  The term  notice as used in
these bylaws shall not mean  personal  notice  unless  expressly so stated;  any
notice so required  shall be deemed to be sufficient if given by depositing  the
same in a post office box in a sealed postpaid wrapper)  addressed to the person
entitled  thereto at 'his last known post office address,  and such notice shall
be deemed to have been given on the day of such mailing. Any notice" required to
be given under these bylaws may be waived by the person entitled thereto.

         Section 3. Voting upon Stocks: Unless otherwise ordered by the board of
directors) or by the executive  committee,  the President  shall have full power
and authority on behalf of the  Corporation  to attend and to act and to vote at
any meetings of  stockholders  of any  corporation in which the  Corporation may
hold stock, and at any such meeting shall possess,  and may exercise any and all
the rights and powers incident to the ownership of such stock,  and which as the
owner thereof,  the  Corporation  might have possessed and exercised if present.
The board of directors' or the executive committee, by resolution,  from time to
time may confer like powers upon any other  person or persons,  which powers may
be general or confined to specific instances.

         Section 4.        Indemnification of Officers and Directors:

         (a) To the full  extent  permitted  by  applicable  law  (whether as in
effect at the time of  adoption  of this  Section or as such laws may be amended
from time to time),  the Corporation  shall indemnify any person who was or is a
party  or is  threatened  to be  made a  party  to any  threatened,  pending  or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative,  by reason of the fact that he is or was a director or officer of
the Corporation,  against expenses (including  attorney' fees) judgments,  fines
and  amounts  paid in  settlement  actually  and  reasonably  incurred by him in
connection with such action, suit or proceeding.  Such  indemnification  may, in
the  discretion of the board of directors,  include  advances of his expenses in
advance of final disposition of such action, suit or proceeding,  subject to the
provisions of any applicable statute.

         (b) The  indemnification  provided by this Section  shall not be deemed
exclusive of any other rights to which a person seeking  indemnification  may be
entitled under any law, bylaws, agreement, vote of stockholders or disinterested
directors  or otherwise  and shall inure to the benefit of the heirs,  executors
and administrators of such person.

         Section 5. Engineering  Decisions in Alaska. All engineering  decisions
pertaining  to  engineering  activities in the State of Alaska shall be; made by
the specified  registered  engineer in  responsible  charge as designated by the
board of  directors,  or other  registered  engineers  under his  direction  ;or
supervision.

                                  ARTICLE IX

                                   Amendments

         The board of directors shall have full power to alter,  amend or repeal
these bylaws or any  provision  thereof,  or to make new bylaws,  at any regular
meeting as part of the general business of such meeting, or at a special meeting
called  for the  purpose.  Bylaws  made,  altered  or  amended  by the  board of
directors may be altered, amended or repealed by the stockholders.